Apple Set to Dominate Tablet Market Through 2012

Apple Set to Dominate Tablet Market Through 2012

El Segundo, Calif., August 25, 2010—Even with a flood of rival products in the works, Apple Inc.’s iPad is unlikely to face a viable competitor until 2011, allowing the company to maintain a dominant share in the tablet market at least through 2012, according to market research firm iSuppli Corp.

The iPad will account for an overwhelming 74.1 percent of global tablet shipments in 2010, with the remaining 25.9 percent consisting of a mix of older PC-type tablet products and competitive slates. Despite the arrival of the first real iPad competitors in 2011, Apple still will maintain a prevailing 70.4 percent share of shipments, iPad research from iSuppli bears out. Even in 2012, the iPad will continue to control nearly two-thirds of shipments, at 61.7 percent, as the competition strives to develop ecosystems of tablet apps and content that can match up with those of Apple.

The attached figure presents iSuppli’s forecast of tablet market share of the iPad and the competition.

“Although the iPad has been on the market for only a few months, powerful interests throughout the technology business are devoting enormous resources to challenge and topple Apple’s domination in this fast-growing marketplace,” said Rhoda Alexander, director of monitor research at iSuppli. “However, if recent history is any lesson, it will take some time for these companies to get their products to market, longer for them to offer necessary software support and infrastructure, and an even lengthier period to begin to rival the overall user experience Apple is able to deliver.”

Remember the iPhone

iSuppli’s forecast of the competitive landscape for the iPad is based on the short history of the iPhone market.

The iPad is in a similar situation as the iPhone when it first arrived. Launched in June 2007, the iPhone was followed by a range of competing products during the next five months to two years, such as the Samsung F700, the UTStarcom XV6800, the Google G1 and the Palm Pre. However, it took almost three years for the competition to offer phones that were not just in the ballpark of being comparable to the iPhone, but also were truly differentiated and superior in some respects, iSuppli’s mobile market research indicates. These phones today include the Motorola Droid, coming 29 months after the iPhone introduction; and the HTC Evo 4G, released 36 months later.

The whole package

There presently are numerous products identified by iSuppli as iPad competitors, such as Android- and Windows 7-based tablets from Hewlett-Packard Co., Dell Inc. and Lenovo. However, none of these is a serious competitor to the iPad from a solution perspective, iSuppli believes.

“Companies are quickly developing products that match or exceed some of the

surface hardware specifications of the Apple iPad,” Alexander said. “But it’s still unlikely that any of the competitors will be able to equal the overall performance experience of the iPad. Apple’s complete integration of hardware, software, operating system and applications is a major piece of what makes the device a standout. And on that basis—an integrated hardware/software design—we don’t see anything in the marketplace at present that seems likely to rival what Apple is offering in tablets today.”

Time-release tablets

A number of new tablet devices are expected, in addition to the ones in the market today.

Leaked images of a Samsung tablet, similar to its Galaxy phone, are now in wide circulation. This is probably the best example to date of a competitor trying to link the smart phone/tablet experience similar to what Apple has done with its iPhone/iPad.

Rumors are also prevalent regarding Research in Motion Ltd. after its recent purchase of the BlackPad domain name.

That said, Alexander believes that the most interesting near-term iPad competition is likely to come from HP, which has the requisite experience in building PC-level devices, as well as access to a proprietary WebOS through the company’s Palm acquisition. Nonetheless, HP’s iPad challenger is unlikely to appear before 2011 and probably will include multiple products—including a tablet with significant creation capabilities targeted at the enterprise market, in addition to one or more consumption-style devices targeted at consumers.

Likewise, rumors have surfaced claiming that Google will release a Chrome OS tablet on this year’s Black Friday, Nov. 26. However, that seems unlikely, given that iSuppli sources indicate the initial Chrome OS does not have touch screen display support. Any touch-enabled Chrome-based device would be more likely to appear in 2011 or beyond. Even then, Google faces some significant challenges in premiering a new operating system and migrating directly from smart phones to tablets, Alexander said. More than likely, Google will take an interim step up to the smart book market before jumping into the tablet fray with the Chrome OS.

Apps obstacles

Even with their hardware ducks in a row, the iPad competitors will encounter other problems in competing with Apple.

“Competitors face some serious obstacles in their efforts to match the total iPad package, most notably competing with the growing suite of iPad-specific applications,” Alexander said. “Apple’s interface and many of its applications are geared to the pixels per inch (ppi) and screen configuration of the iPad, optimizing their appearance on that device. Developers designing applications to work across the broader base of new offerings from the various competitors are facing a mix of pixel densities, screen sizes, and touch technologies.”

For more information on this topic, see iSuppli’s new report, entitled: Portable & Desktop Computing Systems are Ready to Feel the Touch.

http://www.isuppli.com/Pages/Market-Research-Search-News.aspx