NPD Predicts Apple iPad to Lose Tablet Share towards 2017

| Analysis

Apple’s iPad dominates tablets today, but growing competition and even a diversity of operation systems is going to somehow lift Android and Windows tablets in the future, according to research firm NPD. The company released a report on Thursday predicting that Apple’s share of the tablet market will slip from 72 .1 percent in 2012 to 50.9 percent in 2017.

NPD believes the tablet market will grow from 81.6 million units in 2012 to 424.9 million units in 2017. The firm also increased its 2013 estimates from 168.9 million units to 184.2 million. In the chart below, NPD graphs out how it believes market share for those years will shape up—note that Apple’s share increases in 2012 and then again in 2013, and then begins decreasing.

Worldwide Tablet PC Operating System Forecast

Tablet Share Forecast

Source: NPD

“So far in this relatively young product category, the tablet PC market has been dominated by Apple and has tended to include a number of competing products that are similarly configured to the iPad,” Richard Shim, NPD DisplaySearch Senior Analyst, said in a statement. “However, as the market matures and competitors become better attuned to consumer preferences and find opportunities to break new ground, we expect the landscape to change dramatically, giving consumers more choices, which will drive demand for more devices.”

While many analysts and pundits have pointed to Android fragmentation and the lack of compelling tablet apps as part of the reason Android has struggled against Apple’s iPad, NPD thinks that “a growing diversity” of operating systems is actually increasing demand for tablets.

“A growing diversity of operating systems is driving the increase in demand for tablets, as well as rapidly evolving features,” the company wrote in its report. “At the same time, the capacity of component manufacturing is being increased to meet new market demand.”

Looking at the the firm’s own graph, it’s hard to see how a “growing diversity of operating systems” could be the reason for increased demand. There are five major platforms represented in 2011 and three stating in 2012 (with a fourth being a subset of Android devices).

Fewer platforms and growing sales seems to us to imply the opposite, that the market isn’t particularly interested in a diversity of operating systems. Still, NPD has been a champion of the idea that Apple’s competitors would take share away by the very presence of a multitude of devices being made by a horde of open licensees of both Android and Windows devices. As the saying goes, hope springs eternal.

NPD also noted that Amazon’s Kindle Fire lit up the market, saying, “The industry has already witnessed some diversification in the market with the early success of Amazon’s Kindle Fire, with its ‘razor/razor blade model’ of low-priced device predicated on content purchases.”

On Thursday, we noted that IDC reported that Amazon’s Kindle Fire sales fell off a cliff during the first quarter, dropping from more than 16 percent of the market in Q4 of 2011 to 4 percent in Q1 of 2012. Unit sales fell to 750,000 Kindle Fires, clearly an example of “diversification” taking root in the tablet market.

NPD also offered up a graph of how it expects the tablet market to grow in terms of emerging markets and mature markets, as shown below.

Worldwide Tablet PC Emerging and Mature Market Shipment Forecast


 

Markets

Source: NPD

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Comments

geoduck

So what they are saying is that in 5 years things will be a little bit different. Android and iOS will still dominate with a smattering of also-rans. Apple’s share will be a bit smaller but they will still dominate the market.

Wow that’s going out on a limb.

Woodbine

In another study, some 94% of web traffic is from iPad users, so what the feck are all those other tablets doing?

If the rest have 25% of ‘sales’ then I’d really expect less than 94% for iOS.

Garion

Making predictions about anything related to tablet computers five years into the future is futile.

Hell, most analysts and researchers struggle to make accurate predictions about the tablet market just six months from now.

Having said that, even if this prediction pans out, I’d say Apple is in pretty good shape if they can maintain over 50% share of a 425 million tablets per year market in 2017, no?

davebarnes

Making predictions about anything related to tablet computers five years into the future is futile.

I disagree. Not futile. STOOPID.

Lee Dronick

I can’t help but think that in few years Apple will be selling a new type of device and the iPad will be the new iPod.

Garion

I can?t help but think that in few years Apple will be selling a new type of device and the iPad will be the new iPod.

Do you mean to say that tablet computers are just a fad that will be over in a few years from now?

As far as “the next big thing” is concerned I really can’t imagine what kind of device would replace either smartphones or tablets in a few years? They’ll get smarter, lighter and more capable, yes, but I think the basic form factor and touch interface is here to stay for a good while, don’t you think?

Lee Dronick

Something new will come along and make current iPads seem as quaint as iPods. I have no idea what that would be, maybe I should reread classic science fiction. Anyway, it will happen about the time competiting tablets will finally be worthy of competition to iPads.

I will tell one thing that will happen. About six weeks from now when this is all but forgot by us regulars some guest will pop in and make a trolling/flame bait comment. It usually happens on the weekends.

vpndev

Any company that is prediting five-year-out market share in this market segment to decimals of a percentage-point is just stupid. There is no other way to describe it.

wab95

Bryan:

In psychiatry, when someone links an outcome to actions that could have no relationship to that outcome in a rational world, it is called ‘magical thinking’; rather like, ‘If I avoid stepping on cracks in the pavement today, I’ll win the national lottery’.

While the NPD’s predictions fall short of magical thinking, they do qualify as faith-based and irrational, as they appear to be not only fact-free but evidence antagonistic; rather like, ‘The earth is the centre of the universe, and all things revolve around it in one of the seven spheres’.

The difficulty arises when an observation may be correct, even if partially, but the causes are misunderstood or wholly unappreciated - like the movement of the planets and stars in the firmament. The percent marketshare of Apple’s iPad has fluctuated since introduction, and may indeed wane over time, even if its unit numbers and profits increase. Attributing this to ‘diversity’ in the market is, as you’ve pointed out, the faith-based bit.

On the bright side is that human opinion does not create objective reality. The down side is that human opinion, and certainly speculation, affects human behaviour, nowhere more so than markets, which are quintessentially human. Hopefully the likes of IDC and others will serve as a counterweight to NPD, at least for those who think, or better still, people may form their own opinions.

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