Increased sales of smaller, cheaper Android tablets will eat into the iPad’s market share during 2013, with Windows 8-based devices making gains in the coming years, according to research firm IDC.
It predicts that 190.9 million tablets will be shipped during 2013, an increase of 18.5 million from its previous forecast, with the market growing by an average of 11 percent between 2013 and 2016 to an estimated 350 million by 2017.
Apple has enjoyed a commanding position since the launch of the original iPad in 2010, but the last 18 months has seen a raft of smaller tablets, such as the Google Nexus 7 and Amazon Kindle Fire, enjoy great success. A record 52.5 million tablets were shipped in the fourth quarter of 2012 as rival tablet manufacturers closed the gap on Apple.
“One in every two tablets shipped this quarter was below 8 inches in screen size and in terms of shipments, we expect smaller tablets to continue growing in 2013 and beyond,” said Jitesh Ubrani, research analyst for IDC’s Tablet Tracker. “Vendors are moving quickly to compete in this space as consumers realise that these small devices are often more ideal than larger tablets for their daily consumption habits.”
IDC says that it expects both Android and iOS to relinquish some of its market share to Windows 8 in the next few years. It says that Windows 8 will grow from 1 percent to 7.4 percent by 2017, but Windows RT growth will remain below 3 percent during the same period. Windows RT has enjoyed a lukewarm reception from manufacturers and consumers, with the Microsoft Surface performing worse than expected.
“Microsoft’s decision to push two different tablet operating systems, Windows 8 and Windows RT, has yielded poor results in the market so far,” said Tom Mainelli, research director, tablets at IDC. “Consumers aren’t buying Windows RT’s value proposition, and long term we think Microsoft and its partners would be better served by focusing their attention on improving Windows 8. Such a focus could drive better share growth in the tablet category down the road.”
Windows RT isn’t the only loser in IDC’s latest predictions, with firm suggesting that the rise of the low-cost tablet could cause decline in the e-reader market. It believes that sales of the devices peaked in 2011 with 26.4 million units shipped and that the category is expected to grow only modestly in 2013 and 2014 before beginning a “permanent and gradual decline” in 2015.
What do you know about tablets? Find out with our quiz!
Northvolt files for Chapter 11 bankruptcy protection in the United States, to help it restructure…
Targetting AWS, Microsoft? British competition regulator soon to announce “behavioural” remedies for cloud sector
Move to Elon Musk rival. Former senior executive at X joins Sam Altman's venture formerly…
Bitcoin price rises towards $100,000, amid investor optimism of friendlier US regulatory landscape under Donald…
Judge Kaplan praises former FTX CTO Gary Wang for his co-operation against Sam Bankman-Fried during…
Explore the future of work with the Silicon In Focus Podcast. Discover how AI is…
View Comments
The market share estimate is based on units. Windows 8 tablets are more expensive now, so it will sell fewer for now. But low cost models will come out soon. On the other hand, Android is going after the lower and lower end market at cheaper and cheaper prices.
In terms of market share based on revenue, Microsoft's Surface is selling at $999, or $1140 plus the touch cover, that's about 5 times of 7" Android tablets. Revenue-wise, Microsoft only needs 1/5 of Android's market share to beat all Android manufacturers combined.
Moreover, Surface has a gross margin of 45%, vs. cheap Android devices at less than 20% of gross margin, in terms of gross profit, Microsoft makes 11 times more profit selling one Surface Pro than Android vendors selling one Android tablet!
And price-wise, you have Dell, Asus, HP and Lenovo offering lower end Win 8 tablets at about $399 to $499, which is very competitive to iPad and 10" Android tablets. Lastly, don't forget that Microsoft receives $5-$10 of royalty for each Androud device sold.