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Pundits predict plunging iPad market share

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Acer's chairman JT Wang may believe Apple's share of the tablet market may shortly plunge to between 20 and 30 per cent, but market watcher iSuppli doesn't see it falling below 60 per cent, for the next few years at least.

Wang argues that the arrival of a fleet of Android-based tablets from his company and others will together grab the lion's share of the tablet market, leaving Apple with a fifth of the business.

That assumption is based on the way the desktop computer market developed: give people a standard platform - the Wintel PC - and punters will buy into its openness instead of closed, proprietary platforms.

Such a notion assumes that all Android-based tablets will, like the PCs of old, be me-too clones able to run all the available software within a user interface that's identical across all machines. That may not be case this time round, as vendors imprint Android with elements that will help them differentiate their products from their rivals.

That's already happening in the smartphone market, where hardware vendors, rather than the OS developer, control software updates. The result: what seems to be a common platform actually isn't thanks to new UIs and a wide variety of OS versions in play.

They're also jealous of Apple's App Store success and want to emulate it. That too operates to tie users to vendors rather than platforms, making it hard to swap from one manufacturer to another, something that was rarely a problem in the Wintel arena.

One other point to note: Wang's forecast implicitly predicts the commoditisation of tablet hardware which will do no one - other than big-volume, low-margin players like Acer - any good at all. That shift has been resisted in the smartphone market to ensure margins remain high, and the only way that can happen is if vendors work hard to use software to distance their offerings from others'.

If that also happens in the tablet market, it will help Apple maintain a healthy marketshare. Which brings us to iSuppli, which sees Apple taking 74 per cent of the market this year, 70 per cent in 2011 and 62 per cent in 2012.

iSuppli reckons Apple's rivals will be unable to match the iPad's "overall performance experience", a product of the tight integration between hardware and software. This even though iPad rivals will quickly "match or exceed some of the surface hardware specifications" of the Apple tablet.

The researcher highlights HP, now the owner of Palm and the latter's WebOS software, as Apple's main rival, not Acer. Like Apple, HP is in a position to play the vertical integration of software and hardware card, in order to fend off commoditisation, maintain margins and avoid offering vanilla products like everyone else.

We should also point out that even if Apple's market share does follow the trajectory outlined by Wang, that's not necessarily a bad thing. For the next few years at least, the tablet will be a new market, with growing sales. All will benefit.

And while, in that scenario, Android takes the lion's share of the platform market, it's unlikely any of its supporters will dominate the vendor chart, leaving Apple at the top. We think Jobs and co. will be happy with that. ®

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