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

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.