Looking forward, IDC projects that Android’s market share will peak in 2013, falling to 46% by 2017. By the same time, iOS is expected to be at 43.5%, with various Windows options coming in at 10.1%. By that time, IDC believes that worldwide tablet shipments will reach 350 million units. This is a big market, particularly to be so dominated by the top two players.
Is the tablet world shrinking?
One concession most Apple Inc. (NASDAQ:AAPL) followers are willing to make is that the company was reactive when it released the iPad Mini. This has proved to be a good choice, given the shift to smaller tablets. According to IDC’s Jitesha Ubrani: “One in every two tablets shipped this quarter was below 8 inches in screen size. And in terms of shipments, we expect smaller tablets to continue growing in 2013 and beyond.” Full-size tablets are continuing to hold their own, but the trend is toward smaller versions that are easier to carry and operate.
This is particularly interesting given the trend toward increasingly large smartphones. Neil Mawston of Strategy Analytics said, “We expect 2013 to be the Year of the Phablet.” This term refers to the roughly 5-inch-screened devices that are a hybrid between smartphones and tablets. This is another area that Apple Inc. (NASDAQ:AAPL) seems hesitant to enter, but this year’s product cycle is still young.
Cheaper options
Last fall, DigiTimes released a rumor that Google Inc (NASDAQ:GOOG) was planning the release of a $99 tablet that would put even more pressure on the premium products offered by Apple. While the rumor has thus far proved to be just that, it highlights a central issue affecting the market. Price drives volume in many cases, and with product cycles becoming shorter and shorter, spending up for a premium product doesn’t always make sense.
In the tablet market, price is an even more critical factor. Unlike with your smartphone, the bulk of tablet use can be done on a Wi-Fi network, eliminating the need for another cellular subscription; this means there’s no subsidy to defray some of the device’s cost. To that end, when comparing a full-size iPad with a 7-inch Google Nexus 7, while the iPad may offer a somewhat richer experience, the Nexus 7 can be upgraded twice with its staring price of $199 before you will have spent the amount needed to get the iPad. While the argument exists that the iPad may last as long, the allure of new products shouldn’t be underestimated.
Regardless of your relative opinion between iOS and Android-based tablets, Google Inc (NASDAQ:GOOG) has been gaining ground and is now expected to surpass Apple in volume. Never before has it been more necessary for Apple Inc. (NASDAQ:AAPL) to decide if it wants to be a premium brand or an across-the-board competitor. The company has taken it blows, and it’s time to set a direction and then defend it.
The article Apple’s “Can’t Win” Pill, Now in Tablet Form originally appeared on Fool.com.
Fool contributor Doug Ehrman has no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple and Google.
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