IDC has finally published its Q1 2013 report of the tablet market, and it isn't good for Microsoft. Between January and March 2013, Microsoft sold just 900,000 of its Surface tablets, essentially showing no growth from Q4 2012 -- and more importantly, despite the January release of the Surface Pro. These figures are even worse when you zoom out: In Q1 2013, 49.2 million tablets were sold worldwide -- a year-over-year increase of 142.4%, with Samsung and Asus showing YOY growth of 282.6% and 350% respectively.
Let's begin with that monumental figure of 49.2 million tablets sold worldwide in Q1 2013 -- up from around 20 million in Q1 2012, and actually more than the entire first half of 2012. It also means that in Q1 2013, for every three PCs sold, two tablets were sold. If the tablet market continues to accelerate (and it shows no signs of slowing), and the PC market continues its downward trend, tablets should overtake PCs by the end of the year. Not bad, for a market segment that didn't exist three years ago.
The continued growth of the tablet market is attributed by IDC to the increased demand for 7- and 8-inch tablets, while large-screen tablet sales are flattening out. With Samsung, Apple, Asus (Google), and Amazon all releasing very competitive small-screen offerings in the last 12 months, they have all seen huge year-over-year growth. Samsung, as you would probably expect, experienced the biggest leap in tablet market share to 17.9%, from 11.3% this time last year. Apple, despite strong demand for the iPad Mini, saw its market share drop from 58.1% in Q1 2012 to 39.6% today. This wasn't caused by weak Apple sales, but rather the continued expansion of the market, thanks to the cheap tablets being sold by Asus, Samsung, and Amazon.
Which brings us neatly onto Microsoft. In the tablet market, there are currently two major growth sectors: 7- and 8-inch tablets (the iPad Mini, Galaxy Note), and very cheap tablets (Kindle Fire, Nexus 7). Unfortunately for Microsoft, its Surface RT and Pro tablets fall into neither of these categories: The Surface RT is the same cost as an equivalent iPad, while having none of the third-party ecosystem, and the Surface Pro costs $1,000, while only having a four-hour battery life. Just so you have some idea of how poorly Microsoft's combination of big-and-expensive tablets are doing, get this: After shipping some 900,000 Surface RT units in Q4 2012, IDC estimates that just 200,000 Windows RT tablets in total -- including OEMs! -- were sold in Q1 2013. Despite a huge amount of publicity, IDC estimates that the Surface Pro sold around 700,000 units in its first quarter. For comparison, the first iPad sold more than three million units in its first quarter -- and the tablet market was a lot smaller back then. (See: Surface Pro review: Fast, fat, and not enough battery life to be useful.)
Rounding out the tablet market figures, IDC also provides a breakdown by operating system. This time last year, Android was in second place with 39.4% of the market, with iOS at the top with 58.1%; today, Android and iOS have switched places, with 56.5% and 39.6% of the market respectively. In a distant third place is Windows (7 and 8), with 1.6 million shipments and 3.3% of the tablet market (up from 0.2 million and 1%), and Windows RT with 200,000 shipments (a negligible 0.4% of the market). If we subtract Microsoft's own 700,000 Surface Pros, that means the OEMs shipped roughly 900,000 Windows 8 tablets in Q1 2013. Now you have some idea of why Microsoft is sticking to its "60 million licenses sold" figure, rather than telling us exactly how many Windows 8 devices are in the wild. (See: Understanding Windows 8′s lackluster launch and Microsoft’s cryptic sales figures.)
Microsoft, for its part, is rumored to be working on smaller-screen Windows 8 and Windows RT devices, both under its own Surface brand and with OEMs. Smaller tablets will certainly help Microsoft gain more of a foothold, but the bigger issue, as we've said from day one, is whether these tablets will be priced correctly; with the majority of Microsoft's profits stemming from Windows and Office licenses, a cheap tablet seems unlikely. As we stated way back in 2011, a $200 Windows tablet would change everything.
[Image credit: IDC(Opens in a new window)]
