11 Comments

Summary:

Research firm Gartner published its tablet forecast through 2015, saying that Apple will continue to rule the roost. That may be so, but there are some key problems with such a forecast because the tablet wars are only beginning; it’s too early to call this race.

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Apple’s iPad is poised to continue its overwhelming lead in tablet sales until 2015, holding 47.1 percent of the market according to research firm Gartner. Google’s Android tablets will slowly catch up to nab 38.6 percent of sales by then, while media slates built upon platforms such as MeeGo, QNX and webOS will barely be a blip on the radar, accounting for just a combined 14 percent of tablet sales four years from now. On the surface, these predictions may sound logical, but upon closer inspection, there’s more wrong than right here.

  1. 2015 is at least two (or more) product cycles away. In the past 12 months, Apple’s iPad has already undergone one hardware revision as well as gained more software functionality: a dual-core processor with improved graphics, two cameras, and the ability to multitask, for example. While the iPad may not see monumental design changes each year, Apple is sure to evolve the device several times in the next four years. The same holds true for other tablet makers using different platforms. Simply put: It’s too early to predict what the tablet market will look like several device iterations from now due to powerful new processors on the way, faster mobile broadband in wider coverage areas and improvements in mobile software and apps.
  2. No respect for the underdogs. Gartner’s expectations partially suggest HP’s $1.2 billion investment to purchase Palm wasn’t worth the money. Granted, HP bought Palm to use webOS on smartphones, printers and PCs too, but according to Gartner, in 2015 webOS tablets will only account for 8.9 million sales. Putting that in perspective, Apple sold 15 million iPads in its first year of introduction. The tablet tide will lift all boats and unless HP has a complete clunker on its hands with the TouchPad — which I doubt based on the evolution of webOS, an interface that already provides a fantastic user experience — surely the S.S. webOS will rise too.
  3. Neglect for enterprise. Apple’s iPad has already made huge strides in the enterprise, but it’s important to remember it did so based partly because it’s the only game in town. Corporations that rely heavily on existing enterprise architecture from Research In Motion and HP will be influenced to consider tablets from these two vendors. Expect both to be cutting deals with I.T. procurement areas by bundling new tablets with services, laptops, and servers.
  4. Over-reaction to the Honeycomb hold. There’s no question that recent news of Google holding back Honeycomb from the open source community has created a controversy over Google’s commitment to “openness” with Android. Perhaps it’s time for Google to own more of the Android platform in order to provide a better end-user experience. Regardless, the Gartner forecast suggests that Google’s action will limit Android tablet growth for the next several years, saying it will “slow the price decline and ultimately cap market share.” Pardon my language, but I say poppycock! Cheap Android tablets from second- or third-tier vendors typically provide a poor experience, meaning they don’t sell and therefore, Android isn’t gaining significant market share through those avenues anyway. On a related note: did Gartner miss the recent news of three solid-looking tablet computers from Acer, ASUS and Samsung that are all priced well below the cheapest iPad 2 model?
  5. Where are Amazon and Barnes & Noble? Android may not surpass the iOS tablet market share by 2015, or ever, but an entire Android segment is missing from the forecast: e-readers that are transforming into tablets. Barnes & Noble has publicly stated its intent to turn the Nook Color into a rich Android tablet; the company plans a software update this spring to do just that and is already accepting third-party applications for its app store. Meanwhile, Amazon has left plenty of clues that it too may pursue a tablet strategy, including heavy support for Android with digital music, e-books and its own Android app store, which launched last month. The Kindle is Amazon’s best-selling product thanks to the Kindle ecosystem; Amazon could duplicate such success on an Android tablet thanks to its digital media offerings, brand name and software store.

To be sure, Apple’s iPad will continue to own this market, at least in the near future. RIM and HP haven’t yet released their tablet products yet, although both are coming soon. That means both are well behind Apple in terms of time, consumer awareness and developer mindset, although RIM is leveraging Android software on its PlayBook to make up for an app shortfall. Google’s Honeycomb appears rushed to market and isn’t yet a mature platform, but if the Android smartphone market is any indication, Google will move quickly to improve the Honeycomb experience.

The tablet wars have just begun, and it’s far too early to call a winner, let alone who will be in fifth place by the year 2015. Picking the finishing order of horses in the tablet race for 2011 or perhaps 2012 is a much smarter bet, and even that could be tricky given how fast this market is moving.

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  1. Lucian Armasu Monday, April 11, 2011

    What surprises me the most is that they say Android tablets got 14% market share in 2010, and that’s only with the original Galaxy Tab and some tablets from Archos, Viewsonic, and a few other “noname” manufacturers. And they are basically saying that even though HTC, Motorola, Samsung, LG, Sony and many PC manufacturers as well, will all make tablets in 2011, Android will only get an extra 6% – up to 20% of the market. I find that very hard to believe, and I think Android will get 30% market share by the end of the year. And that’s without even counting the ebook reader/tablets that will appear by the end of the year for $250 or less.

    1. If we are going to include eBooks and small Android tablets, then wouldn’t it make sense to also include the iPod Touch as a tablet as well?

      I believe estimates are that Apple is selling around 10 million Touches a Quarter.

      1. 1. He’s NOT counting them. 2. The ipod touch, which is amazing, is the size of a cell phone. It cannot be put into the category of tablet.

      2. nope, not only is the iPT too small it runs the iPhones OS not the iPad’s. just like I wouldnt count the upcoming Android PMP’s either which are likely too sell in the bajillions as well.

        tablets have too have a minimum screen size & the industry seems to be resting on 7″. upcoming eReaders will count if they have a minimum 7″ screen & run full Android + apps, doesnt matter what the frontend UI looks like.

  2. Kevin, thank you for calling Gartner out, so to speak. I haven’t read their report however for them to make that kind of prediction in the time frame that they did is crazy! I look at the mobile tech industry like I look at weather forecasts – very short term. The industry can turn on a dime based on bad PR, manufacturing goof, new tech, etc. Seems that the analyst that wrote this piece may be thinking in very linear terms. IPad got a HUGE boost because, as you said, it was the only game in town albeit very good quality game but everyone is trying to re-invent this tablet-wheel and I’m sure somebody’s going to give the iPad a run for its money at some point.

    I agree with you wholeheartedly!

  3. these “predictions” by any of these numerous organizations are some of the most pointless measures in the entire tech industry. I remember in 2008/09 when iPhone was on the rise & looking to take over the entire industry within just a few years. well, look what happened there, they’ve stalled out at around 24% for over a year now while Android blew pass everybody.

    they never give the underdog a chance, just like they didnt give Android a chance at the time.

    I really hope non-tech savvy financial institutions dont invest in future infrastructure based on these numbers.

    1. Why is Android an underdog. I believe that any time many vendors vs. 1 will most likely sell more. IMO, the individual companies care more about their prospects, profits and market growth than Android itself. The OS for the various manufacturers is just a means to an end. It may be permanent or temporary. I personally view how well are the top vendors doing.

  4. Andrei Timoshenko Monday, April 11, 2011

    When it comes to fast moving, innovative industries, the only thing about a market researcher’s predictions that one *can* be sure about is that their predictions will almost certainly *not* come true. Just look at their track record.

    Of course, the same applies to our own thoughts and discussions here. We may well find logical arguments to back up our current feelings about the future one way or the other (I am sure that this is what Gartner did as well), but in terms of likely accuracy, we may as well be rolling dice…

  5. How did they neglect Microsoft Windows OS? Windows 8 is planned to run on ARM and if Microsoft can release a decent tablet UI it cannot be ignored. It might easily be the one to beat.

  6. Dr. Phil Hendrix, immr Monday, April 11, 2011

    Additional Data on Tablet Market Potential, Growth; “Tablet Envy”

    Kevin, good post. Re: Tablet market potential and growth, here are a few additional results from our Tablet Research study (conducted in March, n=1,014; additional results at http://j.mp/gPhXq7)
    1. 4 in 10 households (HHs) are “very or extremely interested” in purchasing a Tablet.
    2. The estimated percentages of HHs indicating they intend to purchase a Tablet are within 3 months, 15%; within 12 months, 32%; and within 24 months, 43% (avg. likelihood across all HHs, 0-100 scale). We are calibrating these estimates and incorporating into a forecast of Tablet market growth over time.
    3. Interestingly, among HH’s that have already purchased a Tablet (7% in our sample), the likelihood of purchasing a new (additional or replacement) model is 1.5-2x higher than that of non-owners, suggesting that the replacement and incremental markets for Tablets will be very robust.

    Re: #3, I suspect that “Tablet envy” (reluctance to share one’s Tablet, particularly once the device has been personalized with apps and content) will drive significant incremental Tablet purchases, especially in HHs with heavy mobile device users (e.g., teens and young adults).

    We will add a chart with more detail on the findings in #2 to the Tablet Research Summary at http://j.mp/gPhXq7. More results will be included in the full report available in a couple of weeks.

    Dr. Phil Hendrix, immr and GigaOm Pro Analyst

  7. Alex Schleber Tuesday, April 12, 2011

    While I agree that the Gartner study is making way too many assumptions, some of your rosier projections for Android (including even Gartner’s own near 40% share by 2015 number) are probably having the same issue:

    1) The only thing that we know with relative certainty is that Apple has put up a huge lead, and has become the uncontested category leader. If past experience is any guide, that should put it on track to retain 50% at a minimum, but quite possibly more (60-70%). Especially since they went all out on pricing the entry-level $499 iPad so competitively, that the first few would-be competitors couldn’t even catch up with Apple in that regard.

    Thus are Apple’s lessons learned from their iPod mass-market device manufacturing. Which brings up the legitimate question of whether the tablet market will turn out more like the MP3 player market than the smartphone one: It all hinges on the question of how much Apple bungled things by staying with AT&T exclusivity for too long.

    What of there had been a Verizon iPhone (and Sprint and T-mobile as well) by X-mas shopping season 2008? Would Android have even stood a chance? Would it have surpassed iPhone share as it did by now?

    Since the carrier lock-in factor is almost a non-issue for tablets (the trend has been toward the Wifi-only versions anyway), Android has no such help in tablets. Another thing missing: The ingenious Droid counter-branding to the iPhone that lifted the sale of all/most Android smartphones, whether intended or not, doesn’t appear to be crossing over into the Android tablet market.

    So Motorola, Samsung, Acer, et al. are starting nearly from scratch in this regard, and so far I have not seen a break-out branding concept from any of them. And much has already been written about the retail display advantage that the iPad currently has vs. e.g. the Xoom.

    All in all, those are a lot of advantages for the iPad. See here for more on category leadership, etc.: http://businessmindhacks.com/post/is-the-ipad-a-fine-young-cannibal

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