Apple Keeps Tablet Market Crown Despite Android’s Growth Spurt

Source: IDC.com

Recently released third-quarter data from market research firm IDC shows that Apple Inc. (NASDAQ:AAPL) managed to maintain its position as the No. 1 tablet vendor in the world despite nearly stagnant year-over-year growth and the lack of an iPad launch in the previous quarter. According to IDC’s Worldwide Quarterly Tablet Tracker data, Apple shipped 14.1 million iPads in the third quarter, 0.6 percent more than the 14 million shipped in the same period last year.

Meanwhile, the worldwide tablet market saw year-over-year growth of 36.7 percent, with total shipments increasing from 34.8 million in 2012 to 47.6 million this year. Most of this growth was fueled by Android-based (NASDAQ:GOOG) tablet shipments made by companies like Samsung (SSNLF.PK), Asus, Lenovo, and Acer.

Apple was the only top-five tablet vendor to lose market share over the past year, shrinking from 40.2 percent in the third quarter of 2012 to 29.6 percent in the third quarter this year. However, Apple still outsold second-ranked Samsung by 4.4 million tablets. This gap will likely increase in the fourth quarter now that Apple has refreshed its iPad product line.

“With two 7.9-inch models starting at $299 and $399, and two 9.7-inch models starting at $399 and $499, Apple is taking steps to appeal to multiple segments,” said IDC analyst Jitesh Ubrani. “While some undoubtedly hoped for more aggressive pricing from Apple, the current prices clearly reflect Apple’s ongoing strategy to maintain its premium status.”

Though Apple retained its No. 1 tablet vendor position despite relatively high prices, many Android tablet vendors took the opposite approach. According to IDC, the “so-called white box vendors” that make ultra-low cost devices accounted for much of Android’s spectacular growth. However, many of these devices also offer a less positive user experience and are sold at “unsustainably low margins.”

“Android’s growth in tablets has been stunning to watch, but shipments alone won’t guarantee long-term success,” noted IDC research director Tom Mainelli. “For that you need a sustainable hardware business model, a healthy ecosystem for developers, and happy end users.” In other words, if Android tablet makers want to sustain long-term growth, they may need to borrow another page from Apple’s playbook.

Here’s how Apple traded over the past week.

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