Analyst: iPad Continues To Lead The Way

Apple’s iPad franchise will continue to dominate the tablet market for some time to come, according to a new analyst report.

In a 7 July research note issued by Canaccord Genuity, analyst T. Michael Walkley and his co-authors suggested that the iPad 2’s price point is making it difficult for rival tablets to compete in a profitable way. “Our checks indicate both the Motorola Xoom and RIM PlayBook have not sold well at current price points, as we believe competing tablets must sell at a substantial discount to the iPad 2,” they wrote.

Market share wars

Their research note estimates Apple’s share of the tablet market at 56 percent in 2011, followed by Samsung with 12 percent, and Asus with 5 percent. LG Electronics, Motorola and Research In Motion are all given 3 percent of the market, followed by HTC with 2 percent. Although Amazon.com has yet to release a tablet, the note pegs their 2011 share at 5 percent. Nor do those percentages change much for 2012, although Apple loses 5 percent of its overall share to rival manufacturers.

“Given the iPad 2’s affordable prices,” the research note added, “we believe competitors such as Motorola Mobility and RIM would have to sell their tablets at break-even or worse in order to capture stronger market share than our current estimates.” Samsung, Asus and Amazon are seen as the largest Android-based threats to Apple’s reign.

The analysts also don’t discount the possibility of Microsoft, which plans to port the next version of Windows onto tablets, making a significant dent in the market: “We also believe a Windows tablet in [the second half of 2012] could sell well, particularly to the enterprise channel.”

All those tablets entering the market, however, are posing a significant challenge to parts suppliers. Even the largest manufacturers, after all, boast only so much capacity – and with companies ranging from Samsung and Hewlett-Packard to Motorola and Asus all anxious to carve off their own piece of the tablet market, it’s a near-certainty that pressure on supply channels will only increase.

According to unnamed “industry sources” speaking to the Taiwanese publication DigiTimes, Amazon will take delivery of its first batch of touch-panels in September, with an ultimate aim of shipping four million tablet units by the end of 2011. However, demand for the iPad could end up hampering Amazon’s efforts.

Supply problems

“TPK, a major supplier of touch modules for Apple’s iPad tablet PCs, has been reluctant to make a commitment to supplying touch panels to Amazon on concerns of capacity,” read the DigiTimes piece, citing those unnamed sources. “Winek has also landed a fair amount of orders from Apple recently… its production schedule will become tight in the second half of the year and it may be difficult for the company to accommodate orders from Amazon.”

During a 6 June presentation at Apple’s Worldwide Developers Conference, company executives claimed that more than 200 million devices running iOS, including the iPad. Despite that sizable number – not to mention analyst optimism about its market share in years to come – Apple is certainly feeling pressure to keep its hardware and software evolving in order to keep ahead of the growing family of increasingly sophisticated Android devices.

If Apple follows its cadence of spacing new iPad releases about a year apart, the next device will appear sometime near the end of 2012’s first quarter.