Are Tablet Customers Being Duped? Can Apple Do Anything?

| Particle Debris

The tablets released in 2012 are strong competitors to the Apple iPads in many ways. And yet, customers who buy these competing tablets don't seem to be doing much with them. At least, visibly, on the Internet. Is that because customers are being duped by clever advertising that hides the deficiencies of these tablets? What can Apple do to fight back?

According to recent reports, Apple's iPad accounted for over 88 percent of the Black Friday online purchases made by tablets. Apple's Tim Cook has noted the dominance of the iPad in Web traffic and has publicly wondered what people are doing with their non-Apple tablets? Putting them in a bottom drawer?

The recent TMO series on eBooks and tablets has revealed that the competing tablets have good hardware, good design, and good user interfaces. Consumer tablets and pure tablets alike have browsers, email, Twitter, Netflix and perhaps Skype if there's a front facing camera. But some are very much lacking in other key features and functionality. So the natural question to ask is: why aren't customers using these devices more to get online: browse, email and perhaps do some shopping?

Gee, they all look alike.  Which one is cheapest?

The basic idea is that the iPad has only 55 percent market share in tablets but has 91 percent of the Web traffic and 88+ percent of the shopping, at least on a busy day. While there may be some room for additional rigor in this kind of analysis, the trend is clear. People are buying non-Apple tablets, then those tablets are very much less visible on the Internet.

No one seems to know why this is so.

One reason could be that when people buy a less expensive tablet, say, for $199, they're under the impression that it's just as good as an iPad. But when they get it in their hands, they either don't like the browser -- or worse -- they can't find it or figure out how to use it. Perhaps these customers, often befuddled by their PCs are overwhelmed when it comes to configuring a modern tablet. Yet the tablet setup in Android is almost identical to iOS.

Another reason might be that consumers are buying these tablets to engage, occasionally a trusted ecosphere like Google Play, Amazon or Barnes & Noble, but when it comes to general online shopping with an Android OS, they don't trust the security of their tablet. Perhaps because they were bound to buy a less expensive tablet, they're not often in an expansive, buying and communicating mood.

It's likely that Apple's focus on curation, control, privacy and security may be going a long ways towards putting customers at ease when it comes to providing a credit card number to a merchant via Safari on an iPad.

If it's true that modern TV advertising is so compelling and convincing that potential tablet customers think they're getting an iPad equivalent -- but for simply less money -- then it's a real shame that Apple isn't differentiating itself more. It's something that Apple has failed to address explicitly.

Here's one notion of what may be happening. Apple has long considered its products to be like BMW cars. The quality is very high and so is the price. Profits are good, so market share doesn't matter. For example, no one believes that a Chevrolet Cruze for US$19,000 is the equivalent of a BMW 335i for $45,000. There is implied value and quality in the price without detailed, degrading comparisons.

Could it be that Apple feels that the price of the iPad mini at $329 so clearly sends a message that it is vastly superior to a $199 consumer tablet that nothing more needs to be done? Could it be that many customers think that they're getting the same tablet fundamentals without paying the suspected Apple premium? Some of us at TMO are thinking that perhaps, before Apple's tablet market share drops any further, the company should engage in a TV advertising campaign to clearly show people what they're getting with a tablet like the iPad. And not getting with the rest.

That brought us to a discussion of Apple's previous, very successful, "Get a Mac" campaign with John Hodgman and Justin Long. Those ads clearly but humorously spelled out the advantages of a Mac over a PC. Now that we're in the Post-PC era, perhaps it's time to spell it out for the iPad. Just a thought, of course.

"Get a Mac" campaign. Image Credit: Apple

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There was no technical news debris worth digging into this week, what with the holidays upon us. Particle Debris will return on January 4, 2013.

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Comments

mrmwebmax

+

John, reading the article on the 55% market share, ABI Research actually was referring to “shipment share.” Am I correct to assume that that means shipments into retail channels, and not necessarily sales into end-users’ hands? Perhaps that accounts for the discrepancy…rather than people buying Android tablets and leaving them in drawers, Android OEMs are shipping them into the channel where they’re sitting unused and unsold on shelves?

Is there any accurate analysis of what percentage of what tablets are actually being sold to end-users?

In addition, I’d be curious to know how many MacObserver members have ever seen a non-iPad tablet in the wild. Much like a Windows Phone, I never have. Even watching YouTube and vBloggers like Jenna Marbles (language warning…make that an alert, NSFW, small children, etc., but so worth it), the tablet is always an iPad.

I don’t see shipment share as having much value as a metric. After all, didn’t Apple, pre-Steve’s return, almost kill itself by shipping too many Macs into the channel, where they remained unsold, just so managers could get promoted and earn bonuses by saying how many Macs they shipped???

John Martellaro

mrmwebmax: In the long run, except for truly awful products, shipment share is pretty close to sales. Else things would be way out of kilter.

A friend of mine has a Moto Xoom. When we get together, I bite my tongue—never mention it.  But he redeemed himself by getting an iPhone 5 for himself and an iPad mini for his wife.

mrmwebmax

+

Then assuming shipment share is roughly equal to the number of tablets in peoples’ hands, is there a breakdown anywhere of Android tablets by device? Maybe the market share/usage discrepancy is because of only a small number of Android tablets being general-purpose devices like the iPad, as opposed to Kindles and Nooks?

YodaMac

I think it’s obvious that if you’re buying a cheapo tablet then you don’t have money to burn shopping online.  No surprise there.

And aren’t most people into Windows because it’s so easy to pirate/share software and not have to buy it themselves?

There will always be people who look only at the price, bottom line, when making their purchase decisions.  Apple is not selling to them anyways, so why advertise to them?

AdamC

I find it strange that shipped is considered sold because ‘eventually they end up in consumers’ hands.

I believe you are presuming too much, I believe you have never heard of return products.

But how long will it takes before they are sold and stuffing the channel is a very lame way of measuring the product and neither is presuming that one day it will be sold a good idea, wouldn’t the sold measurement be better as a measurement of products sold vs shipped.

gnasher729

There are plenty of devices out there (Kindle and Nook for example) that could in theory do everything that an iPad can do, but in reality they are priced as an eBook reader, sold as an eBook reader, used as an eBook reader, they are fine eBook readers with happy eBook reader customers, but for some reason they are counted in the “tablet” market share. These eBook readers are not used as tablets because they were never purchased as tablets.

The reason the iPad’s market share is dripping is that devices are counted that are not actually in the same market.

John Martellaro

gnasher729:  Watch this YouTube video, THE Christmas TV ad for the Kindle Fire HD, then tell me again that it’s being sold as an eReader.

http://www.youtube.com/watch?v=7rScz2uu7SY

Michael

@mrmwebmax: I’d have to agree with you. If in fact those numbers were actual sales and not shipments, then we would see more in the wild, but we do not. I’ve seen 3 non-iPad tablets over the past 3 years. One was a Kindle Fire, one I couldn’t identify but looked a lot like an iPad, the other was a Windows tablet. However, I’ve seen dozens of iPads in the same time frame.

When the iPhone only had a fraction of the market it has now, I still saw iPhones all over the place. So there is something going on as far as market share is concerned - they are just shipment numbers and not actual units sold. I’d also like to point out that the numbers mentioned are in fact just estimates as most OEMs do not report numbers. Apple does. In fact Apple not only reports shipments, but they also specifically mention how many are left in the channel at the end of any given quarter. With those two numbers, you can calculate actual sales.

@John Martellaro: “shipment share is pretty close to sales. Else things would be way out of kilter”

Remember the HP Palm tablet… they originally reported strong numbers as well even though they just sat in Best Buy’s warehouse. That didn’t translate into actual sales numbers until they had a fire sale to dump them, costing HP a few hundred million dollars and scrapping Palm altogether.

Given the number of tablet OEMs on the market, the 45% market share are just shipments and most of them are just sitting in warehouses or on store shelves.

I’d even guess that this is also why Android’s share of the phone market is so large and why there are so many “Buy One, Get One” deals.

Zak

As a Surface owner, I have to say that a far amount of my web browsing happens spoofing an iPad because frequently that’s the only way I can get a tablet-friendly site as lot of vendors haven’t updated - or cared to update - their device detection. It’s like the “built for IE” syndrome back when that browser has 90% market share.

I find it hard to believe Android devices have the same problem but, then again, it is arguable that only recently have they truly been competitive.

akcarver

Apple has already used the right slogan. “If you don’t have an iPad, then you don’t have an iPad.”

JCX

Those ads “Mac vs PC” were awesome, they should make it with the iPad; since the iPad is successful and useful

Lafael

Units shipped, units sold, and units used… Only because competing tablets are increasing their market share in units shipping, one cannot expect the shipping market share to reflect installed base. i expect most ipads from 1st and 2nd generation to still be in use. Life-time of products also matters. Flimsy defect-prone tablets from 2010 will not make web-traffic now. The iPads large share of web-traffic and web-shopping may partly reflect the quality of tablets shipped in 2010 and 2011, but doesn’t necessarily reflect an inferior quality of the late 2012-competition.

Data would be more interesting if traffic-share was compared to accumulated unit sale in 2011, first half 2012 and 2nd half 2012.

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