Analyst Bumps Tablet Estimates, Sees Apple with 63% Share

| Analysis

UBS analyst Maynard Um has bumped his estimates for Tablet sales for 2011 and 2012, and he told clients that he expects Apple to maintain ~63% market share for both years. In addition, he said that while competing tablets have made great inroads into retail stores, few end users are actually buying them.

The Numbers

Mr. Um raised estimates for Apple’s iPad shipments to 37.9 million in 2011, up from 32.3 million. For 2012, he’s now modeling for 53 million iPads, up from 46.9 million. He believes the company will maintain ~63% market share for both years, meaning that he now sees 60 million tablets of all brands in 2011 and 84.1 million tablets in 2012, a staggering quantity for a category that didn’t exist before April of 2010.

Let’s look at what those numbers look like:

UBS Chart

Chart by The Mac Observer from UBS data

The figure above nicely illustrates the thesis of John Martellaro’s Hidden Dimensions column from earlier on Wednesday in which he stated that Apple owns this market, leaving everyone else to fight over the crumbs. In this lineup, Apple is a giant, whose shade looms over each and every competitor, dwarfing their pathetic attempts to play in this market.

But if we look at the same data in a different fashion, we can see another tale, and that’s the ability of the many to work together to (try to) overcome the giant amongst them. In this case, they may not actually overcome Apple’s giant iPad, but they do combine to keep another giant — Google — relevant.

In the figure below, we pitted Apple against all would-be competitors (the chart works for both 2011 and 2012 estimates, as UBS is modeling the same share for Apple in both years).

UBS Chart

Chart by The Mac Observer from UBS data

Either way you slice it, if the analyst’s estimates hold true, Apple will own and define the media tablet market even more strongly than it does the smartphone market (in that Apple is in control of the direction of the smartphone market and owns the vast majority of hardware profits from the sale of smartphones, even while Android is the larger platform following along in iPhone’s footsteps).

Those Competitors

PullquoteWe’ve seen the reports of Apple’s Android tablet competitors taking share away from iPad, but Maynard Um’s checks with retailers resulted in him believing that this is mainly sales into the channel, and not into end user hands. He stipulated that these were “anecdotal retail checks,” but said that, “Despite the increased visibility for tablets at retail channels, our anecdotal checks indicate that sell-through for many of the non-iPad tablets was limited.”

He added, “We did note the ubiquity of a few tablets at almost all the channels we visited, particularly RIMM’s Playbook, but channel sell-in and sell-through appear likely to be two different stories for the majority of vendors not named Apple.”

Part of the problem for those competitors, according to Mr. Um, is that Android tablet makers are finding it difficult to differentiate themselves from both the iPad and from other competing Android tablets. As this reporter has said, both frequently and often, price isn’t going to play the same role in the tablet market — experience and content are the driving factors in generating demand for tablets.

“Our view that those that have broader ecosystems (i.e., offering greater and more seamless utility, particularly to content) will be more likely to succeed,” Mr. Um wrote.

Hence his modeling for Apple to maintain ~63% share through 2012.

Shares in AAPL traded lower Wednesday, ending the day at US$392.59, down $10.82 (-2.68%), on strong volume of 23.4 million shares trading hands. the dip occurred during a broad sell-off as the markets reacted negatively to the ongoing debt debacle in Washington.

*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.

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My thought in looking at the histogram above was of Jonathan Swift’s Gulliver’s Travels, and his sojourn amongst the Lilliputians.

This projection with the tablet market is, as you’ve averred, directly analogous to that of the smart phone, in which the sheer volume of the many Lilliputians aggregates to a respectable market volume, but neither directs that market nor claims the majority of its profits. That role resides, at least for the foreseeable future, with Apple.

I should add, Apple may do well to read the rest of Swift’s tale and ponder how best to avoid the need for rescue required by its protagonist.


Sell in, sell out. What a lark! In the hands of the consumer is all that counts.
- - - - -
and so it is written . . . Steve Jobs has patience, is influenced by the science of Buddhism to think outside conventional traps, and has sharp memories of injustice and what such does to creativity.

Apple, indeed does own this (iPad) market, but it owns a whole lot more than consumer tablet sales . . .
It owns the light computer marker, aka the MBA market, with its crazy solid state storage and processors, now backed by power.
The next generation of MBPs coming out seem to be inline for a shakeup so may be following the trail blazed by the MBA.
Now that the Mac mini finally has its power unleashed, such a refresh, one fails to imagine, may be in store for the iMac which seems a little long in the tooth?
Prices of all computer lines have shown steady steps down, could it be Apple has learned a good lesson from its pricing of the MBA and the iPad, comforted by the size of its purse.
If a brighter iPad 2+ is at hand, could the 16GB iPad 2 become the entry pad with a headache making price for the facimilators?
And could the iPad 2+ continue the original price structure with a remake that shoots it past the stratosphere?
And would Apple have put off its new iPhone unless it had some crazy stir-the-soup-recipe, a real game changer that may give the copycats faltering chance of imitating?

If Apple wants to take the copiers down, price that includes profit is the forgers? main weakness undermined further by shoddy quality, source problems, lack of an ecosystem, lack of differentiation all standing in the face of almost 80B comfort baubles, a war chest that Apple may have plans to use in sudden death show down.

Maybe its time Apple took the gloves off and pulled the gallows? lever to put the beasts to pasture. M$, though short on scruples, did it. Apple has the coin to do it legally, fairly and honestly, at least int he realm of trade and commerce. That’s what you do when you have the patience to plan and save your pennies.

This could be a Shakespearean play, a comedy with a happy ending, full of blood, guts, gore but little battle. It’s been almost a decade and a half without a major stumble by Apple.  “so it was written . . . ” may be why SJ is so well focussed.

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