Is Apple Winning a Bigger BITE of This Pie?
Apple (NASDAQ:AAPL) will gain more ground over Google’s (NASDAQ:GOOG) Android tablets this year amid an overall surge for the sector, according to a worldwide tablet sales forecast released Thursday by market research firm IDC.
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According to the latest IDC Worldwide Quarterly Media Tablet and eReader Tracker, Apple’s iPad will regain the market share it lost to Android tablets in 2011, and is forecast to take over 62 percent of worldwide sales.
IDC estimates that tablet sales in 2012 will reach 107.4 million units, up from 69.6 million in 2011 and just 19.4 million in 2010, when Apple first introduced the iPad.
“Demand for media tablets remains robust, and we see an increasing interest in the category from the commercial side,” said Tom Mainelli, research director of IDC’s Mobile Connected Devices unit. “We expect pending new products from major players, increasingly affordable mainstream devices, and a huge marketing blitz from Microsoft (NASDAQ:MSFT) around Windows 8 to drive increased consumer interest in the category through the end of the year.”
Still, Apple’s share of the market is expected to grow, which means Apple will have a disproportionately large share of the new business, compared to the past. Apple’s share is expected to reach 69.8 million units, which would account for 62.5 percent of projected global sales.Though the iPad dominated in 2011, it accounted for 58.2 percent of the market, down from the device’s launch year, which saw iOS tablet sales take a 75.2 percent share of the market.
Apple’s growth this year will come at the expense of Google — Android market share is expected to fall 2.3 percent from the 38.8 percent seen in 2011, when Amazon (NASDAQ:AMZN) released the biggest competitor the iPad has seen to date: the Kindle Fire.
“After a very strong launch of new products in March, Apple’s iPad shows few signs of slowing down,” Mainelli said. “The addition of the Retina Display and 4G capabilities to the third-generation products clearly enticed many current owners to upgrade. And Apple’s decision to keep two iPad 2s in the market at lower prices – moving the entry-level price down to $399 – seems to be paying off as well.”
Apple’s market presence would be further strengthened if the company were to release a rumored 7-inch iPad at a lower entry price than the current iPad lineup, according to Mainelli. The company is thought to be readying such a device for launch sometime this fall, but so far clues have been scarce, and Steve Jobs’ opinion on the matter — he was against a lower-end device — may be an indication Apple has no plans to create a sub-standard iPad to appeal to a wider demographic.
While Apple’s third-generation iPad has no real competition, a smaller iPad would have to contend with a range of Android tablets and tablets running Microsoft’s Windows 8 and Windows RT. The IDC does not currently include the two new operating systems as part of its forecast, but will be adding them next quarter as the first devices begin to hit shelves.
Shares of Apple (NASDAQ:AAPL) closed $2.60 at $574.13 per share on Friday.
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