The iPad vs. Android tablet battle

With the launch of the new iPad now in the rear view mirror, the annual iPad sales hysteria has already begun. Since its introduction in 2010, the iPad has unmistakably dominated and defined the tablet market. iPad & tablet sales have been zooming over the past year, with annual growth in excess of 250%. However, in the last quarter, the iPad’s market share dropped to 54% as compared to 45% for Android tablets. Even with this drop, absolute sales numbers for the iPad have seen phenomenal growth, which emphasizes the staggering growth of the tablet market overall.

Now, as with the launch of any major Apple product, the iPad will see a spurt in sales & market share this quarter. But what will the iPad’s market position look like in this industry in the long-term? In order to understand this, we need to understand the primary product & market segments in the industry. Industry segments typically evolve over time and have a greater impact as an industry matures. We have seen the beginnings of this kind of segmentation starting to form, with the launch of products like the Asus Transformer Prime and the Kindle Fire. Let’s have a look at these segments and how they would affect the iPad, as well as the industry at large.

1) Media Tablet Segment

Kindle Fire

A media tablet could be described as a generic term for any touchscreen-only tablet. Obviously, this segment was created by Apple, with the launch of the iPad. This segment currently accounts for the lion’s share of the tablet industry and with the launch of the Amazon Kindle Fire, this segment has become significantly more competitive. Since buyers of media tablets are predominantly average home users, the usage patterns are skewed primarily towards browsing and media consumption. For these users, the key factors affecting their purchasing decision comes down to brand, pricing & a large application base. This is the primary reason why the Kindle Fire has managed to be so successful in such a short span of time. Based on the target market for this product segment, the screen size and the price of the majority of products would be at the lower end of the market (7+ inches & $200-$400). This segment will start to get significantly more competitive later this year, with Google set to launch an Asus manufactured, possibly quad-core, Nexus tablet at $200 and Amazon set to launch multiple models of an upgraded Kindle Fire.

2) Hybrid Tablet Segment

A hybrid tablet is essentially a high-end tablet, with the added functionality of an attachable keyboard dock & trackpad. The form factor is similar to an ultrabook and it is also mouse-compatible. This segment was created by Asus, with the original Asus Transformer and has grown in popularity with the launch of the Asus Transformer Prime. Today, the hybrid tablet segment accounts for anywhere between 10-15% of all Android-based Tablets and is one of the fastest growing segments (after the Kindle Fire). Now, other PC/Tablet manufacturers have taken notice of this segment and have begun launching similar products.

An exciting entrant into the hybrid space is Lenovo. Look for their offerings to hit the market soon.

Typing long emails and editing documents has long been a nightmare on touchscreen-only devices and hybrid tablets have come to prominence as a solution. Additionally, they are far more comfortable to use and carry, as compared to a tablet with a third-party keyboard accessory/dock, and offer significantly longer battery life. In terms of usage patterns, hybrid tablets could be used for productivity or high end gaming, apart from media tablet uses. Based on these usage patterns, the target segment for hybrid tablets is primarily high-end home users/power users and, in the long run, enterprise users. For these consumers, the key factors affecting their purchasing decision are most likely processing power, a keyboard dock, long battery life & a large, high-end application base. Based on this target market, the screen size and the price of the majority of products would be at the higher end of the market (10+ inches & $400-$600).

How does this affect the iPad?

The new iPad and the iPad 2 are still essentially high-end, high priced ($400+) media tablets, without the added functionality of being hybrid tablets. As these segmentation trends start to make their mark over the next year or two, the iPad will be caught between these two worlds. Apple could tackle this problem by introducing a smaller, low priced iPad (much to the dismay of the late Steve Jobs) or by introducing an iPad with a dockable keyboard (with integrated controls). Introducing a smaller, cheaper iPad would make Apple compete on far lower margins, risking their industry-leading operating profit margin. Unfortunately for Apple, introducing an iPad with a tablet dock would undoubtedly cannibalize sales of the Macbook Air, which is a high value product for Apple. Both strategies have their pitfalls, but they will be necessary if Apple expects to continue to be a major player in this industry.

Market Outlook for 2012

Most analysts estimate the tablet market to grow by about 100-150% this year. But driven by the launch of the upgraded Kindle Fires & especially the $200 Nexus Tablet, I expect sales to beat analyst estimates. Based on these product launches, I expect Android tablets to pass the iPad and capture over 50% of quarterly sales by the end of the year. The iPad will see massive growth in absolute sales numbers as well, but will not be able to match the growth of  the competition. I have already covered my expectations from Windows 8 tablets and a late launch in Q4 2012 would mean they would have a minimal impact on the market.

What about you? Have any thoughts on where this is all headed? iPad or Android?


This article, The iPad vs. Android tablet battle , was originally published at AndroidAuthority.com – Your Android News Source.

By | 2012-04-04T23:01:38+00:00 April 4th, 2012|Android Related, Just the Tablets|0 Comments

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