Apple Inc. (AAPL), Google Inc (GOOG), and Microsoft Corporation (MSFT) Need to Hear This

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The ascent of the tablet only continues. According to research firm IDC, Q4 of this year will mark the first time tablets outsell PCs. For the whole year, PCs will still rule, according to IDC, but by 2015 tablets will begin outselling PCs, and that’s not likely to change in 2016 and beyond. Assuming the tablet trend pans out as IDC believes it will, there are two questions device manufacturers need to answer: How are tablet and smartphone owners using all those mobile devices, and do they have a product that fits their needs?

Noted research firm Gartner Inc (NYSE:IT) has answered the question of what users want in their devices, and Apple Inc. (NASDAQ:AAPL)Google Inc (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT), would be wise to listen up.

Survey says

Gartner Inc (NYSE:IT) conducted a survey recently of 726 tablet owners in the U.S., Australia, and the U.K., and what it learned, first and foremost, is tablet users love their entertainment. According to the study, 50% of device screen time was spent playing games; watching live or streamed TV, videos and movies reading books; or listening to music.

Google Inc (NASDAQ:GOOG)

Using tablets and other mobile devices like smartphones for communicating — sending emails and visiting social media sites, for example — averaged only 26% of users’ time. Being productive, which Gartner describes as editing videos or writing, accounted for a mere 15% of users’ activity. And finally, searching for information like the weather or conducting research occupied all of 9% of device screen time.

Perhaps most intriguing, and the biggest takeaway for device manufacturers, was the change in consumers’ buying habits from Gartner’s 2011 end user survey. Two years ago, the No. 1 “purchasing criterion” was brand, and Apple Inc. (NASDAQ:AAPL) dominated. In 2011, Apple sold over 40 million iPads for a commanding 62% of the market; clearly brand-conscious consumers loved all things Apple.

Now, according to Gartner, brand ranks only third on the list of purchasing criterion, behind features and price, which coincides perfectly with the iPad’s decline in market share. As recently as Q2 of last year, Apple Inc. (NASDAQ:AAPL) held a 60.3% share of the tablet OS market, followed by Google Inc (NASDAQ:GOOG)’s Android OS tablets with a mere 38% share. Microsoft Corporation (NASDAQ:MSFT) hadn’t started playing in the tablet sandbox yet, so it gets a pass.

As of the Q2 of 2013, Google Inc (NASDAQ:GOOG)’s Android dominates with 62.6% of the tablet OS market, while Apple Inc. (NASDAQ:AAPL)’s share has dropped to 32.5%. As brand fell to third in importance for device-buying consumers, Apple’s tablet share nosedived during the same period. Price continues to weigh on consumers’ buying decisions over brand, which is Apple’s bread and butter, so iPad sales will feel the pressure.

The takeaways

If tablet sales are about features and price, as Gartner’s survey suggests, what do Apple Inc. (NASDAQ:AAPL), Google Inc (NASDAQ:GOOG), and Microsoft Corporation (NASDAQ:MSFT) need to consider as new devices roll off the production line? Both Microsoft and Apple, with price points considerably higher than the lean, mean Google Nexus machines, are behind the eight ball in those two key areas. For most users, an affordable device with a quality screen meets their needs.

Remember, 50% of device user’s time is spent on entertainment, and if they can get what they want for $400 or less, which is about what Google Inc (NASDAQ:GOOG)’s highly rated Nexus 10 sells for, instead of the $500 needed for an iPad or the $800 for a Surface Pro, you can bet they will.

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