Apple’s Aging iPad Portfolio Opens Door for Samsung

| News

Apple's previous stranglehold on the tablet market, in marketshare, has declined dramatically in the last year. Factors include Apple's aging tablet portfolio and customer demand for inexpensive, small screen tablets, according to a Canalys report released on Thursday.

In Q2 of 2012, Apple shipped 17 million iPads. In Q2 2013, the number was 14.6 million. During that time, Samsung raised its tablet shipments from 1.87 million to 7.37 million, a 294 percent increase. Other tablet makers, other than Microsoft, also improved their numbers dramatically, according to the data Canalys published.

Image credit: Canalys

Senior analyst Tim Couling said, "The chasing pack of Samsung, Amazon, Lenovo and Acer each grew annually by over 200 percent, driven by increasing demand for small-screen tablets... Apple’s decline in shipments and share has been partly attributed to its aging portfolio... With branded Android tablets available for less than US$150, the PC market has never been so good for consumers, who are voting with their wallets."

While an aggressive performance from Samsung and others would have been expected, there are many bright spots for Apple. Apple is making serious money with its current portfolio thanks to its gross margins. Apple and Google both appear ready to do combat with a next generation 7-inch "Retina" tablet early in 2014.The iPad still has a serious lead in apps optimized for the iPad's larger display. Apple's customers are more inclined to spend money on serious productivity apps for their iPads, a factor that keeps big money rolling into its developer community.

Finally, while Apple was first out of the blocks with a great, disruptive iPad tablet in 2010, the best quality products can't be expected to maintain dominant marketshare in a cutthroat commodity tablet market that's beginning to mature.

Mr. Couling continued, "While it is true that Apple is losing its stranglehold on the tablet market in terms of volume, it will remain its most profitable vendor for years to come. Apple has already faced a similar battle in the smart phone market, and it now looks increasingly likely that it is readying a [an iPhone] product that can address lower price tiers and high-growth markets in that space. If this is indeed the case, Apple could replicate a similar portfolio play in the tablet market."

We know that the margin models in the 7-inch market are different. For example, Amazon sells its Kindle Fire at, perhaps breakeven, for the sole purpose of generating content revenue. "These products generate little absolute margin for channel partners, vendors or component manufacturers. Content, applications and accessories (especially cases and keyboards) are now even more important to boost margins," Mr. Couling concluded. Accordingly, there are many diverse factors that determine the long terms prospects for success of a tablet. As Microsoft has found out.

Popular TMO Stories



Shipped does not mean sold…

Jules Hobbes

Why, then, is the iPad’s web traffic share well above 80% and even increasing? Maybe people buy cheap – after all, they are all iPads, right? – and regret it later.

John Martellaro
Marcus Moore

When there are companies willing to make literally nothing off hardware sales- it’s impossible for there not to be the “pricing umbrella” that Apple was able to avoid in the iPod era.  There will always be people who want cheap things… the commodity PC market has thrived on it. 

But this is an 11th hour argument.  We’re just ahead of a refresh of a 1 year cycle.

If the mini does go Retina, it will be interesting to see if Apple does what they did with the iPad3, and drops the price of the 1st generation model.


I know it may sound pretty early to say it but the iPad is already a “mature” market” in my view… people do not feel the need to go get every new iPad as it comes out, it doesn’t really surprise me that sales are down, also “those who know” are almost certainly holding out for the next model and iOS7.
Cheap Android tablets are just that… cheap - I own a little “7in Neruochrome Candy” that cost me £40 (with Jellybean 4.1) and yes people do buy them… because they are cheap and ok for simple browsing/email/etc. I have to admit I bought mine to compare and contrast with my iPad 2, to try it and see what I thought of it and yes because it was cheap. It is nice enough - but I pick it up once or twice a week and even then sometimes wonder what to do with it…. it is not as big as my iPad or MacBook Pro and not as handy as my iPhone and not as slick as any of them. To be honest I have to “make the effort” to pick it up and use it because it offers me nothing “special”... and because it cost “not much” it could easily go into a drawer and stay there unused and no one would notice or care - the money involved isn’t at a level where you would get endless earache of the “you bought that dang tablet and never use it… what a waste of money”
So yes this stuff is selling - commodity PCs always sold… cheap phones will always sell and as Mr Jobs said “it doesn’t always have to be a zero sum game” Apple can win and so can google because they want different segments of the market for different reasons… Ferrari and Mercedes are not directly competing with Skoda or Ford…


I can only share what I saw this week. I flew through three airports in one day, and in that time, I saw no more than two non-iPad tablets—one being used by a child, and the other not really being used. The guy held it, but didn’t seem to be inclined to use it—dead battery maybe? On the other hand, I saw dozens if not hundreds of iPads and iPhones (counted together). I’ve been living a bit outside the realm of Apple dominance, where Samsung seems to rule the day in the phone market, and nobody really uses a tablet, so the shock of suddenly seeing iPads (both normal and mini) and iPhones in almost every hand was a bit of a shock to my system. Also, I was surprised to see that apparently 50% of the laptops I saw in use were Apple laptops. All we could think (my family and I) was that we had entered an Apple world. I have a hard time believing that non-iPad tablets are getting anywhere near the usage of iPads, but this is a tiny sample, and just one person’s anecdote. grin


Regarding JonGI’s comments, I travel a lot for work, and have noticed that on airplanes and in airports, iOS devices seem to rule.  My theory for this is that people who fly are generally higher income, or traveling on business.  In first class and business class on international flights, almost all of the tablets are iPads (when they are not E-ink Kindles).  And there’s almost a 50% penetration of MacBooks.  Far higher than Apple’s market share would suggest.

This tends to agree with data that shows that Apple has a very high percentage of marketshare with upper income people.

Look at, say subway or local bus riders, and/or Greyhound bus/Amtrak riders.  I bet the percentage of Apple devices drops.

Lee Dronick

  Look at, say subway or local bus riders, and/or Greyhound bus/Amtrak riders.  I bet the percentage of Apple devices drops.

A couple of months ago I was on a city bus and saw some guy listening to a Rio or some such MP3 player. Now that being said I do see a lot of iOS devices on the bus and trolley as well as feature phones and pads.

The other day at Starbucks I saw a guy using a MicroSoft Surface. That was, the first that I have seen in the wild.



Research companies have to make a living by selling their reports and the question is where did they get their base figures from for their final estimation for their reports.

Is it all guesswork or there is a scientific explanation and I can’t wait but wouldn’t be holding my breath for it.


We have an iPad and we use it a lot. We surf (and I mean we, as in we mirror it using an Apple TV and we surf), do e-mail, buy stuff etc.

Like our old Macbook Pro, it’s not the latest, but it works well and we’re happy with it. Newer, faster, more pixelier will not get us to buy another. Not until we cannot do what we do on the old one. (Or they come up with something cool that you cannot do on the old one).

So I do think there is a saturation and satisfaction factor, just like with Macs. They work well and hold their value longer than the competition.


People aren’t just voting with their wallets, if you look for features v price Nexus 7” kicks Apple mini’ ass all day long. Just that GPS chip alone is enough but when you consider the higher res screen, the usb, the replaceable battery, the better look and feel over the hard “a little too wide” iPad mini. And regarding Apple’s stuff “holding value” there isn’t a faster way to lose value than to have new models come out every 12 months imo. So, in the case of the mini tabs, assuming one might be foolish enough to upgrade every year - why would you spend the extra dough on iPad mini when it doesn’t spec out close to the features of the Nexus?

Rogifan 1

CudaBoy, perhaps some people don’t care about specs.  Or care about an important one like battery life where the mini kicks the Nexus 7’s ass?  Also better look and feel is subjective.  And a lot of people prefer the wider aspect ratio and thinner bezels.  Nexus 7 might be better for watching widescreen video but for web browsing and book reading I’d take a mini over the 7 any day.


Huh? Who wouldn’t care about specs? especially if your spending $100 more for an inferior product?  You are wrong about battery life, Android updates their software in the background all the time and the latest update of a few days ago doubled the battery life. My bud showed me a screenshot of his battery life before and after the update; the “after” showed a day and a half battery life left.
  I don’t know anyone who would prefer reading on a screen with LESS resolution as well, I suppose your vision is subjective too?


The facts as we see them discussed miss the point of, as Intruder points out “Shipped does not mean sold…”

John, does Apple give/say such “In Q2 of 2012, Apple shipped 17 million iPads. In Q2 2013, the number (shipped) was 14.6 million.”
I was sure Apple gives “sold” not “shipped”. There is a HUGE difference.

Seems FacsimileSam and others have all the store shelves bound for their goods filled to the hilt such that there is no more room for parking further unsaleable wares.  It may be an Android stocking stuffer Christmas for the master copier’s merchandise.

A day later than this report, Daniel E Dilger presents a pretty compelling report on the facts as they sit on the reality scale, as opposed to how agenda presenters have set to twist and distort.  An unapologetic delight for any Apple enthusiast -

John Martellaro

Intruder:  For additional insights on the shipped vs. sold analysis, see Bryan Chaffin’s recent article.

Log in to comment (TMO, Twitter or Facebook) or Register for a TMO account