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Summary:

Small slates are expected to account for 32 percent of all tablet sales this year says iHS iSuppli. After nearly two years of saying there’s a market for the 7-inch tablet, it’s good to see the analysts reaffirm my own experiences. Now: Where’s that 7.85-inch iPad?

A trio of Nexus 7 tablets

An estimated 126.6 million tablets will be sold in 2012 — up 56 percent from 2011 — and of those, nearly a third won’t be 9.7-inch iPads. Instead says IHS iSuppli, 41.1 million smaller slates in the 7-inch form factor will be sold this year, accounting for 32 percent of all tablet sales. A marginal amount of 5-inch devices, such as Samsung’s Galaxy Note, will comprise the rest of the market.

Apple’s iPad sales will still be growing, but it’s clear there’s an opportunity in small slates. And iHS iSuppli points this out, suggesting that “the 7.x-inch category will be helped by the launch of lower-priced tablets in that size segment, along with what is widely believed will be a product offering from Apple later this year for a smaller iPad.”  I suspect that if Apple does launch a smaller iPad, the 7-inch segment will be even higher than the forecast because it’s clear that there’s a market for small slates.

I noted why this tablet size — and the portability it brings — was appealing more than 18 months ago after spending several weeks using a 7-inch Galaxy Tab as well as a 9.7-inch iPad:

“I’m willing to give up a smidge of usability or a wider array of software to gain the ability to easily use the device everywhere I go. It’s this very concept that makes the smartphone so enabling, regardless of make, model or platform: the ability to be connected everywhere is what’s driving the mobile revolution forward. In fact, I’m actually using my Android smartphone less as well. The Tab does all of the same things as my Nexus One, but on a larger, higher-resolution screen, making for a better overall experience.”

Indeed, even some at Apple joined the bandwagon back then, only we didn’t know that until last month. During the Apple v. Samsung trial, Apple’s Scott Forstall read aloud an email sent to him from Eddy Cue in January 2011. Cue read the the GigaOm article I wrote explaining the benefits of smaller tablets, agreed with many of the points made, and passed it along to Forstall as well as Apple CEO Tim Cook. Cue said, “I believe there will be a 7-inch market and we should do one,” which has prompted hope for a 7 or 7.85-inch iPad tablet.

Galaxy Tab is half the size of iPadPortability and functionality are only part of the small slate success factor, however. Lower prices are surely prompting some to see if a 7-inch tablet can fit their needs. One only has to spend $199 — 40 percent of the lowest new iPad cost — to try a tablet. Low pricing by itself isn’t a driver though; after all, there have been cheap Android tablets for the better part of three years since the Archos 5 launched. Yet, small slates have only recently begun to make a dent in the tablet market that Apple’s iPad has dominated.

That’s because for $199, you now get a solid experience. Look to the Nook Tablet, Amazon Kindle Fire or Google’s Nexus 7 tablet as examples. They may not be quite as polished as the iPad to some, but they’re not junk either. If you can get 80 percent of the iPad’s satisfaction in a smaller Android tablet that costs 40 percent less, is it a good buy? Clearly, the answer for a third of the current tablet market is yes.

I don’t think that small slate sales are hurting Apple’s 9.7 iPad very much, if at all, however. Due to the price and size, I’m not sold that the majority of potential customers actually compare the two directly. There can be two successful sub-markets here, both large slates and small slates. I own both and often turn to my new iPad for content consumption on the larger screen when I’m around the house. On the go, however, the iPad stays at home and my Nexus 7 pulls the load. Maybe that will change if Apple does offer that mythical small slate.

  1. …and the iPad will take the other 68%.

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    1. Superbly insightful, Aaron. ;)

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    2. The iPad isn’t the only 10″ tablet! Let’s call it 67% ;-)

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  2. Susan Yasue Grogan Monday, September 17, 2012

    I held out for a smaller tablet and for the price to reach a point that seemed reasonable, given what I would be using a tablet for on a regular basis. Now that I have it (Samsung Galaxy Tab 2 7″) I don’t know how I got along without it; I use it for more things than I’ll list here. I don’t find myself yearning for a larger tablet though. When I do stream movies it’s usually close to my head anyway (in bed most often). If I play games on it, they aren’t the type that would benefit from a big screen, since I’ll stick to my PC for grand games. Essentially, the 7″ “fixes” the flaw that has always made me lukewarm about the functionality of smartphones, since I find the slight bump up in screen size is a sweet spot for using apps of all kinds without the irritation of a small screen.

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  3. “Flounder, on the other hand, means ‘struggle, move clumsily, be in a state of confusion’ ( new recruits floundering about in their first week).”

    And the profits made from that market are…? That tells the entire tale, not the sales figures.

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    1. Sure the profits are important – no dispute there. But if that were the *only* metric to measure success, I don’t think we’d see the Apple press release on 2 million iPhone 5 pre-orders. ;)

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      1. Yes but 2 million iPhones equals actual profit making market share as well as actual corporate income. What would 2 million Amazon Kindle Fire sales equal? It looks like they’re buying market share to me, which is only good for appearances, not actual value. If they could equate Fire sales with income resulting from user purchases at Amazon, that’s a different matter. I suspect the same situation is the case with the Nexus 7, but we don’t yet know.

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  4. Apologies for CopyPaste Pro oddly shoving the “Flounder” definition (used elsewhere on the net) in with my post.

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  5. Kevin you are always careful to point out that different people have different needs, expectations, and even pocketbooks. I think 7″ sales are primarily price driven. I rarely see anyone out and about with anything other than a smartphone. In business settings I see a lot of iPads and a sprinkling of 10″ tablets but never the 7″ versions. While it seems likely Apple will introduce a mini iPad, I suspect it will only skew the volume of tablet sales even more in their favor but perhaps at the expense of income. Have you seen any analysis that might confirm or refute this?

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    1. I’ve been surprised in the last year to see how many people are using Kindle Fires on airplanes. Haven’t seen any 7″ tablets in business settings yet, but plenty of iPads.

      Out in the street I’ve seen a few people taking pictures with their iPads (surprised me a little), and I wonder if I’d recognize people using 7″ tablets as easily as I can recognize the larger iPad – anecdotal data may be skewed by device size here.

      A small iPad will probably be a better product than current 7″ tablets (and I own a Nexus 7), but with so many Android phones out there I suspect that a lot of people will stick with Android out of familiarity, price and existing investment in Android apps.

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  6. Brad Buchmueller Monday, September 17, 2012

    And what percentage of the tablet market profits will the 7 inches take? 5% or less? Ha!

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  7. Were thinking of giving our 8 yr old a tablet for her birthday next month. I think an iPad is too big & costs too much for a child and I can’t wait for iPad to make a 7″. What 7″ alternative do you recommend? Shell use it mainly for reading, some games ( we will limit & monitor this) And restricted browsing. Ease of use, sensivity and reaction and more importantly option to restrict what she can access inc password to download games would be important
    Look forward to your suggestions

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  8. Skeptical. I think the 7″ crowd is mostly about the price conscious and the folks that don’t want to buy Apple and those who want an ereader with benefits.

    The price is tempting. But we mostly surf on ours so I just can’t see going down to a smaller screen where I would have to be scrolling and zooming in/out all the time.

    My kids mostly game on the thing which is better served by the larger screen as well.

    I don’t buy the portability argument. The 7″ tablets so far don’t have cellular data capabilities. I don’t imagine many are carrying around their 7″ tablets in their hand on the street. I imagine they have a backpack or bag or briefcase or purse.

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  9. Working in the it industry for over 10 years, tablet is still a toy for me hence, my kids are usjng the original galaxy tab 7″

    A powerful laptop sony vaio z and my galaxy note soon to be galaxy note 2 serve my needs so i suspect tablet although grown will slow down soon once sarurated similar tk laptop and destop now

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  10. Its rather funny how Steve Jobs said 7″ tablets were DOA and now they are taking in a pretty big % of sales. Now Apple turns around and says internally that a 7″ tablet is critical to their growth. Hardly an epiphany, more like Apple talking out of both sides of its mouth and lying at the same time.

    Either is DOA or the new tablet revolution but you can’t say both. From a price point I would not pay $400 7″ tablet, its just not worth it and the lower priced tablets are fine for what they are aiming to accomplish. For me I still prefer my iPad 3 LTE on Verizon but that’s because Moto and Verizon botched the original Xoom 4G LTE upgrade and I had zero confidence they would actually deliver it on time (they didn’t) or at all (which they did) but I got rid of it anyways.

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