Pundits predict plunging iPad market share
Need Apple worry? Nah
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. ®
COMMENTS
Apple don't do low-end.
If they can't make a fat profit from each sale, they don't bother.
The maths speaks for itself:
Company A makes products which sell for £100 more than they costs to make, so they make £100 million in profit for every million you sell.
Company B sells for just £10 more than their product costs to make, you're they're making £10 million in profit for every million sold.
Company B must sell *ten times more*, just to catch up with Company A, let alone overtake them. This means their support teams have to deal with ten times more customers, which eats into that razor-thin profit margin. If both companies spend 10% on customer support, Company A is spending £10 per sale, while Company B is spending just £1 per sale.
Apple are Company A. They don't give a gnat's chuff about the low-end market, because that only makes them pennies. They'd have to cut corners and build down to a price.
Don't believe me? Try reading the reviews of the various Android phones that have been released to date. You'll soon see what I mean: they clearly set a price first and throw features at the dartboard it until they reach that price. Hence good phones marred by resistive displays; good phones marred by shoddy build quality; lots and lots of if-onlies, with very few genuinely good products—and the Nexus Ones and Desires are no cheaper than their fruit-logoed rival.
Android is a race to the bottom: it's the Windows of the mobile industry. It's already becoming increasingly fragmented as a market—which version(s) of Android do I support? What hardware can I assume is in the device? What's the display resolution and aspect ratio? Does it have a slide-out keyboard? Can it do multi-touch? Is the CPU any good? What about the GPU? Etc.
More variations = more expensive development and customer support.
The only company that's *guaranteed* to make serious money from Android is *Google*. Not HTC. Not Acer. Nor anybody else. And certainly not the app developers.
Shields Up! Fire at will Mr Worf!
I used to be abusive about the iPad thinking WTF?! is that about.
Then I got to play with one and fell in love. Yep, it's locked down, it uses iTunes (grrrrr) and there are other things it won't do but it's stunningly beautiful and easy to use that you forget the flaws. Besides, I can sit on my sofa and slide my fingers over the screen just like it's a datapad or console on Star Trek. I like the iPad, my family loves the iPad; it was my money and my choice!
So.....
....despite the fact a couple of Android tablets are already in the wild and going nowhere, and despite the fact Archos has been making tablets for years, and despite you could buy Windows Tablet at least 7 years ago....
Despite all that, Apple are going to lose a huge amount of market share to products that have already been released and failed, or unreleased but following in the footsteps of failed products.
I've no doubt that Apple will lose market share over time, but the iPad is not the iPhone, and it's not competing in the fickle mobile phone market. The iPad (or AnyPad) is simply an addition to your existing laptop/desktop and so instantly will appeal to a certain type of person - eg one with money.
So is that money conscious person going to choose Android or Apple?
My money is on Apple 4 times out of 5.
It will be interesting to see how many nerds out there will buy an AndroidPad when they become universally available, or whether they will just pass it up, and continue on cheap netbooks.
Yeah, and your point?
This part is what seals it for me...
'Even though the Apple pad is a knock off of pads released in late 2009, it still has less functionality and inter-connectivity than the earlier pads/tablets that can show videos/movies, have 3D screen displays, USB and SD connectors and, some, even have telephone capability.'
The only thing that's 'close' to the iPad was the Kindle -at that time. Many of the 'pads' with those functionalities were nothing more than prototype dog-whistle, vapours. Why not mention the MS Courier or the HP Slate or the JooJoo or the MeGoo or the Galaxy Tab as well as the functionality and marketing success of those 'pads', even though they do not 'really' exist instead of spewing something you know ABSOLUTELY nothing about that does?
"give people a standard platform - the Wintel PC - and punters will buy into its openness"
Back in the days before Visual Basic it was actually very difficult to develop for Windows, and the OS has never been particularly "open"
