Mobile // Mobile Devices
News
7/25/2014
12:20 PM
Connect Directly
Twitter
RSS
E-Mail
50%
50%

Apple iPad Loses Tablet Market Share

Apple is still the top tablet vendor, but it's losing ground and needs new lines of growth as the market cools.

iPhone 6: 8 Ideas Ripped From Rivals?
iPhone 6: 8 Ideas Ripped From Rivals?
(Click image for larger view and slideshow.)

With 13.3 million iPad shipments in the most recent quarter, Apple remained the world's top tablet-maker but continued to lose market share, according to new estimates from research firm IDC. Apple's iPad shipments eased 9.3% compared to the same period last year, while the larger market grew 11%, to just over 49 million units.

IDC pegged Apple's market share at 26.9%, down from 33% in the year-ago quarter, and 32.5% in Q1 of this year. Samsung maintained its hold on second place, shipping 8.5 million tablets and snaring 17.2% of the market. The South Korean electronics giant increased shipments a modest 1.6% but nevertheless lost share because the market grew faster than Samsung's business did. Samsung held 18.8% of the market in Q2 of last year and just over 22% last quarter.

In a statement, IDC analyst Jean Philippe Bouchard said tablet sales have slowed as large-screened smartphones, or phablets, become more popular. Analysts have continually pointed to phablets as the tablet market, which was still growing at a 60% clip in Q2 of 2013, has cooled in recent months. It's likely no coincidence that Apple is reportedly prepping a large-screened iPhone.

Bouchard said shipments have also slowed because current tablet owners are waiting longer than expected before upgrading to new models. Bouchard also said commercial adoption of tablets has slowed. Other recent data might explain why: Though businesses have invested in tablets, many spent recent months replacing old PCs and upgrading from Windows XP, rather than buying more slates. The shift in buying patterns demonstrates that while tablets can be useful to businesses, many professionals still require more traditional computers.

[Apple's working to deepen its hooks into the enterprise. See Apple-IBM Deal: 9 Moves Rivals Should Make.]

Aside from Apple and Samsung, no tablet vendor achieved double-digit market share. Lenovo ranked a distant third, with 4.9% of total tablet shipments, but was still the quarter's biggest gainer. It boosted shipments from 1.5 million to 2.4 million units, a 64.7% uptick. Asus was just behind Lenovo with 2.3 million shipments, a slight uptick from 2.0 million units in the year-ago quarter. Acer rounded out the top five, with 1 million tablets shipped during the quarter -- good enough for 2% of the market. Acer suffered the biggest year-on-year decline in shipments, however; it shipped 50% more tablets in Q2 last year than Q2 of this year.

It should be noted that whereas Apple reports tablet figures, other vendors do not, so there could be a margin of error in the research firm's overall estimates. IDC did not provide breakouts for other notable tablet vendors outside the top five, such as Microsoft or Dell.

IDC said smaller players and white box vendors accounted for more than 45% of shipments. None of them individually had much share, but aggregately, shipments from this group were up 33.4%. IDC characterized this as a "leveling" of the playing field, and a new phase for the market.

While Apple's drop might seem distressing, CEO Tim Cook dismissed concerns when the company announced earnings this week. He said the company is "very bullish" on the tablet market's future. In typical Apple fashion, Cook didn't elaborate, other than to blame the shipment reduction on inventory adjustments. But new iPad models are expected this fall, so the company might show its hand sooner than later. Online rumors and supply chain reports have held for months that Apple might be prepping a larger-screened iPad Pro to sit above the iPad Air.

Even if that product never pans out, Apple's recent pact with IBM could provide another avenue for growth. As one of the devices that stimulated the BYOD movement, the iPad already enjoys healthy enterprise use, with deployments in nearly all Fortune 500 companies. It still doesn't boast, however, the kind of deep penetration within these organizations that notebooks have. But much of Apple's enterprise market share developed organically, without Apple making Microsoft-style overtures to gain business customers. With IBM's sales teams now behind them, iPads could further expand their enterprise reach.

Cyber-criminals wielding APTs have plenty of innovative techniques to evade network and endpoint defenses. It's scary stuff, and ignorance is definitely not bliss. How to fight back? Think security that's distributed, stratified, and adaptive. Get the Advanced Attacks Demand New Defenses report today. (Free registration required.)

Michael Endler joined InformationWeek as an associate editor in 2012. He previously worked in talent representation in the entertainment industry, as a freelance copywriter and photojournalist, and as a teacher. Michael earned a BA in English from Stanford University in 2005 ... View Full Bio

Comment  | 
Print  | 
More Insights
Comments
Newest First  |  Oldest First  |  Threaded View
tjgkg
50%
50%
tjgkg,
User Rank: Ninja
8/1/2014 | 11:31:15 AM
Re: Why is this surprising to Apple?
True Apple positions themselves as like the Mercedes-Benz of tablets. But you can do better. For me this is a convenience and something that I could do without. My S4 smartphone has the same apps and I can watch movies, play games and listen to music just as well albeit with a smaller screen. And it costs a lot less. And I use my phone for personal and business use. The iPad is more of a companion than worker. It costs much more than a laptop and cannot do quite as much.
tjgkg
50%
50%
tjgkg,
User Rank: Ninja
8/1/2014 | 11:26:50 AM
Re: Why is this surprising to Apple?
I'm not sure that nobody is making money on tablets. I would venture that Samsung is. And if Apple is starting to lose market share, that means they are making less money. That cannot go on forever. I didn't buy the iPad for status, I bought it really as a convenience. Frankly I can do everything the iPad does on my smartphone but i like the larger screen the iPad has.
tjgkg
50%
50%
tjgkg,
User Rank: Ninja
8/1/2014 | 11:22:33 AM
Re: Why is this surprising to Apple?
That's for sure. My iPad costs more than most laptops and you can't do as much. I'm not really sure what Apple is going to do. Then never want to lower prices and always charge premium prices for their products. People will go elsewhere on this.
Andrew Binstock
50%
50%
Andrew Binstock,
User Rank: Author
7/29/2014 | 8:26:35 PM
Chromebooks? Not convinced.
Charlie: Hmmm, I'd need to see hard data to accept that. I'd be more inclined to believe that laptop users had migrated to Chromebooks, rather than tablet users. 
Charlie Babcock
50%
50%
Charlie Babcock,
User Rank: Author
7/29/2014 | 6:32:49 PM
Did some iPad buyers migrate to Chromebooks?
Although they seem to belong to different categories, I think some former iPad buyers have become Chromebook buyers. The orientation toward the Internet and retrieving things out of the cloud is a core, shared attribute.
stotheco
50%
50%
stotheco,
User Rank: Ninja
7/27/2014 | 1:54:12 PM
Re: Why is this surprising to Apple?
Apple is a premium brand and that's how they market themselves. However, you've got to have something else going for you aside from the brand. Apple has the first part down right--unfortunately, other tablet makers have upped their game while keeping prices more attractive for customers. Their high price point definitely hurts them.
nasimson
50%
50%
nasimson,
User Rank: Ninja
7/26/2014 | 12:17:42 AM
Asia
What is interesting to note is the origin of the companies manufacturing tablets.

Except for Apple, 4 of the top 5 manufacturers are from Asia: Asus, Acer, Lenovo & Samsung. It appears that high-tech consumer gadget manufacturing is not returning to East Europe or America anytime soon. Only if the innovation, R&D and design shifts to Asia, they can reap the full benefits of new product development.
Maitred
50%
50%
Maitred,
User Rank: Apprentice
7/25/2014 | 11:31:30 PM
Re: Why is this surprising to Apple?
Who else besides Apple makes money on these tablets? As with high end smart phones, the answer appears to be nobody. If you have a declining market share but are the only guy making money, you are going to be the survivor. The competitors are scrambling to find a way to make money and cost cutting goes only so far. Note that tablet sales are down and app sales are up... Who would you develop apps for? Focusing on numbers of tablets sold is a stat that is much less meaningful than one might think. Apple is a powerhouse brand and it offers status. Apple is safe until a competitor can outsell Apple with a profitable product.
Thomas Claburn
50%
50%
Thomas Claburn,
User Rank: Author
7/25/2014 | 6:30:51 PM
Re: Why is this surprising to Apple?
Apple's premium pricing hurts particularly when everyone in your family wants to use an iPad. 
tjgkg
50%
50%
tjgkg,
User Rank: Ninja
7/25/2014 | 1:45:04 PM
Why is this surprising to Apple?
Let me start off by saying that I have the iPad Air 128 gig model and I love it. I upgraded for several reasons. One was the increased storage space. Another reason was for the improved wifi capability. And finally for the upgraded processor. My older iPad was 2 years old. My iPad is not a work device but a companion. I use it whilst travelling as an entertainment and information device. For that it works great. At home I keep it near me when I want to quickly access information without having to go to my desktop or wait 10 minutes for the laptiop to boot up.

Having said this I get why sales are down. These devices are expensive not only to buy but to maintain if something should happen to them. They are not really suitable for business even though now i could put Office on the device. There is no SD slot or USB connectivity. And while the Retina Display is very nice, some other tablets have better resolution for far less money.

When Apple first brought the iPad out there were few competitors. Now they have had time to gear up and some are putting out superior products while Apple has a slow turnaround time for new iPads. The competitors tablets are also considerably less expensive. While some may argue that the Apple devices are top quality while the competitors quality varies considerably, Apple really needs to either emphasize the benefits of their system or come out with gee whiz stuff more frequently. I doubt that will happen now that Jobs is gone. But the prices really can be eyewatering and are going to be an issue going forward.
Building A Mobile Business Mindset
Building A Mobile Business Mindset
Among 688 respondents, 46% have deployed mobile apps, with an additional 24% planning to in the next year. Soon all apps will look like mobile apps and it's past time for those with no plans to get cracking.
Register for InformationWeek Newsletters
White Papers
Current Issue
InformationWeek Tech Digest, Dec. 9, 2014
Apps will make or break the tablet as a work device, but don't shortchange critical factors related to hardware, security, peripherals, and integration.
Video
Slideshows
Twitter Feed
InformationWeek Radio
Archived InformationWeek Radio
Join us for a roundup of the top stories on InformationWeek.com for the week of December 14, 2014. Be here for the show and for the incredible Friday Afternoon Conversation that runs beside the program.
Sponsored Live Streaming Video
Everything You've Been Told About Mobility Is Wrong
Attend this video symposium with Sean Wisdom, Global Director of Mobility Solutions, and learn about how you can harness powerful new products to mobilize your business potential.