iSuppli: Tablet Market Remains a “One-Horse [iPad] Race”

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iSuppli updated its media tablet forecast Wednesday, and the company bumped estimates for Apple’s iPad for the next four years. The research firm also noted that Apple’s competitors are struggling, and characterized the market as a, “one-horse race.”

“All the momentum in the media tablet market is with Apple right now,” Rhoda Alexander, senior manager, tablet and monitor research for IHS, said in a statement. “The competition can’t seem to field a product with the right combination of hardware, marketing, applications and content to match up with the iPad.”

The report also noted that Apple has been able to “slow or complicate” competitors’ entry into some regional markets with its patent litigation strategy, and said that the iPad remains the only tablet benefitting from third-party peripheral advertising.

“With Apple lapping its competitors,” Ms. Alexander added, “many of whom are still struggling to get out of the starting gate, this remains a one-horse race.”

To that end, IHS iSuppli bumped its 2011 iPad unit shipment forecast to 44.2 million units, up from 43.7 million. Looking out at 2015, the firm bumped its forecast to 120.1 million, up from 97.9 million units.

In the figure below, IHS iSuppli charted out its overall tablet forecast, starting with actual shipments in calendar 2010 through projected estimates in 2011.

iSuppli Chart

The updated report says that the firm now believes that Apple will hold on to a majority market share through 2013. It bumped projected market share for Apple in 2012 to 74% (up from 64%), and in 2015, the company believes Apple will maintain 43.6% market share, up from a forecast of 32%.

That chart shows a staggering iPad growth rate for Apple, but it also shows the competition picking up significant steam in 2013. What it doesn’t explain is why competing tablets will finally take off.

Why For?

The report is effusive in its praise for Apple’s success and strategy in the tablet market, and noted the exit of HP, which was announced last week. The question, therefore, is what is it that will change starting in 2013 that will allow these competing devices to finally find willing buyers?

The Mac Observer asked for clarification on this issue, and Ms. Alexander explained that her company’s models are predicated on a few central points. The first is that as the media tablet market grows, more resources and R&D efforts will pour in from companies interested in capturing those dollars.

In other words, we’ll see more and more and more tablet devices entering the market from an increasing pool of competing companies. As with the smartphone market, the analyst believes that this ever-increasing number of devices will eventually add up to significant sales on non-iPad devices.

Secondly, IHS iSuppli has identified the notion of content consumption being of paramount interest to those who already use and love their iPads (and, theoretically, other tablets).

At the same time, the firm believes that a growing segment of the computer-using market only consumes content—they don’t produce it. This is similar to what Apple CEO Steve Jobs and his other executives said when the iPad was introduced.

While demand for the iPad heretofore has largely stemmed from the experience the device offers, IHS iSuppli believes that for those consumption-only users, tablets will grow to fill the same “need” for a computing device that computers currently fill.

When that happens, the need-based demand for tablets will grow enough to allow non-iPad competitors to jam a toe into the iPad door and start gaining share.

The third major element the analyst discussed with TMO is that it’s easy for those of us in the U.S. to forget that the iPad competes in a global market. IHS iSuppli believes that in some regional markets, particularly markets in Asia, local and regional competitors will be able to gain share with smaller and cheaper devices in the future in a way that they haven’t been able to do so far.

All of these reasons combine to result in the forecast you can see in the chart above, but it’s a process the firm believes won’t get any real momentum until some time in 2013.

Look for some analysis from this reporter in the next day or so on the topic.

Comments

John Martellaro

As always, reports like this assume that ready, willing and capable competitors to the iPad will jump in and seize their part of the market share.  The problem as I see it is that current players are falling like dead flies.

A whole new generation of players must arrive, having learned from others. As Bryan has predicted: Microsoft and Amazon.

mhikl

Really guys (iPad killing devisers), you can only sit on the pot for so long till you get bored and find some other little distraction to toy with. The fact that your padensteins are heavy, clunky malformed hack jobs says a lot for the choice of parts. The rule is: make ?em real cheap. Keep the gravy thin. Always worked before.

I agree with JM. The game is won and we chose the right side. The only reason old Apple survived as it did even though M$ owned the market is that its product was better than M$‘s. This time round, it’s iPod all over again. (yogasm)

And there just isn’t and won’t be a better pad than the iPad. There won’t be some little start-up or old crank-up that comes out with something better than the iPad and compete, even in single digit form as Apple did with its computer agains MicroSoft.

Samsung?s exacto pad of the iPad means the experiences they have learned from the best is helping them refine their skills so they can get here, but by the time they are here, Apple will be there as is what happens with Apple; what with their danged iterations and leaperations past the dreams and sights of all others.

Learn fast and learn deep, Samsung. You won?t have the master crafter around to study much longer.

All this should all be boring. It?s not. After all these years it still looks funny seeing dogs playing cards and chimps slapping on lipstick.

And again, the iPad is not a tablet. It doesn?t use a stylus or voice commands. It doesn?t have a full fledge M$ OS as its underpinnings. It isn?t hard drive driven and it ain?t 4 inches thick or weigh-in like a tricycle. These are some of the specks from Wikipedia and M$ Bill?s very early twenty-first century tablet description, and Bill does claim to have invented the tablet, and named it,  though I read about those heavy stone things in Sunday School. The iPad or pad is not mentioned there in Wikipedia so it must not be a tablet or a PDA and the tablet isn’t a PDA, etc.

From my megaphone: ?Like we don?t call them horseless carriages any more for a reason?.

Just a feeble attempt at humour to get the point across. But think about the horseless carriage, Bryan. And when you think about Apple’s little contraction and HP’s and Samsung’s etc., do you think tablet or do you think pad.

Let’s see if I have time to add this: there are the following: main frame computers, DT computers, laptop computers, netbook computers, PDA computers, tablet computers, pad computers.

mike

There’s just one way to compete with Apple, is to build your own device from scratch, from hardware to software. Apple is using a strategy that is slowly strangling competition. The strategy is based on controlling the whole production line, inventing new methods of production to reduce costs, keeps margins high and prices low.

The strategy is this: as Apple margins are high (30%, compared with 10% of competition), they reduced the final price to a point that the competition is struggling to match. When competition is able to match, they will reduce more the price, and more, and more, always keeping 30% margin, as they will reduce costs to keep the same margin. Competition will die like dead flies, as said by Martellaro.

mhikl

You do understand the scenario, Soothsayer Mike.

The last bit made me think a little but the reducer is Apple and thinner is alway better.

As Descartes might say:  Pod ergo Pad

translationL   I Pod therefore I Pad

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