The iPad Revolution Leaves Many Casualties

Apple (NASDAQ:AAPL) will continue to lead the market as tablet sales mirror the “wild exuberance” of the cellphone industry in its early years, market watcher IHS iSuppli said in a report. Apple’s iPad will capture 61 percent of the overall market share this year, with total tablet unit growth rising to 126 million. In 2013, the tablet market is set to grow another 63 percent to reach 205 million units, on its way to 360 million units sold by 2016.

Investing Insights: Will This Deal Help Apple Conquer China?

“Tablets comprise one of the strongest categories in the consumer electronics market today, with heady growth in the next few years matching the wild exuberance of the cellphone or mobile handset industry in its initial years of market-busting expansion,” the report said.

In 2011, Apple had received strong competition from the growth of Amazon’s (NASDAQ:AMZN) Kindle Fire, which also helped overall Google (NASDAQ:GOOG) Android tablet share to rise to 41.1 percent from 31.1 percent in the third quarter of 2011. However, IHS predicts Android’s share will decline this year, dropping to 38.4 percent.

“The key to Apple’s media-tablet success has been its offering of a complete hardware-plus-content ecosystem,” IHS researcher Rhoda Alexander wrote. “The combination of a good-looking device, well-designed applications, video, books and music has provided consumers with an easy-to-use product and an appealing use case. Such an ecosystem took Apple years to put together, starting with the iPod plus iTunes Music Store more than nine years ago, and it’s proving to be a challenge for the company’s competitors to replicate it.”

Apple’s (NASDAQ:AAPL) sales could also get a further boost from the launch of the rumored smaller, and lower-priced, iPad. The company has not confirmed the existence of such a device, though supply sources have been pointing toward it.

IHS adds that Microsoft’s (NASDAQ:MSFT) release of Windows 8 later this year will also spark excitement for new Ultrabooks and hybrid devices that convert between a laptop and a tablet. These devices, which IHS calls PC tablets, will see a strong growth, too, though they won’t be able to cannibalize the media tablet market. Of the 205 million total tablets sold in 2013, IHS predicts 197 million units will be made up by media tablets, while PC tablets will contribute just 8 million.

Don’t Miss: Is Apple Supersizing the Next iPhone’s Display?