Blog Post

Why the iPad’s 95.5% Market Share Means Nothing, Yet

The iPad (s aapl) is making headlines today for dominating the global tablet market during the last quarter, accounting for 95.5 percent of all shipments, according to Strategy Analytics. It’s a big number, and unquestionably a success for Apple, but it’s also a statistic that belies the nature of the clash to come for tablet devices.

Winning the Game It Created

Right now, claiming that Apple is dominating the tablet market is a little like saying Alexander Graham Bell dominated the telephone industry in 1876. By almost all accounts, the iPad forged its own niche, and left competitors scrambling to catch up. But, as with the telephone, that doesn’t mean competitors won’t catch up.

Slaying the Dragon

The situation is similar to (but not the same as) that faced by other device manufacturers when the iPhone was first introduced. Like the iPad, the iPhone was widely embraced by tech enthusiasts and consumers for its ease of use, design and App Store. For a long time after its introduction, the efforts of other handset makers was widely framed as the quest for an “iPhone killer.”

[inline-pro-content]Many of those same companies are now faced with creating an iPad killer, but the climb seems much steeper still since Apple isn’t entering an already dense and competitive market, as it was with the iPhone. But is it really a higher mountain to climb?

The Rest of the Field

The iPad is well-placed to remain the leading tablet device for some time to come; I’m not disputing that. But I do think we’ll see a much more wide open field at this time next year. Whereas with the iPhone, competitors had to worry about both hardware and software gaps between themselves and Cupertino, this time around, device manufacturers have Android (s goog). With a growing built-in software distribution platform, and the weight of Google behind it, Android offers something the first companies making prospective iPhone killers didn’t have available to them.

As soon as Android-powered tablets can find the right hardware mix, and refine production practices and parts sourcing to bring prices down, we’ll see a boom in business in their favor. Android accounted for just two percent of global tablet shipments last quarter, but think about what was available. Considering the caliber of Android devices that were on the market, I’d say that’s a success in itself.

Android won’t be the only one elbowing for room in the tablet market, either. BlackBerry (s rimm) is set to release the PlayBook, which will be popular among enterprise customers. Hewlett-Packard (s hpq), Microsoft (s msft) and ViewSonic look poised to grab a piece of the action, too.

The Stage is Set

Apple has done an amazing thing with the iPad. Its sales to date are tremendous, and it led to consumers embracing tablet computing in a big way. But talking about its market share at this early stage isn’t really saying much of anything at all. The interesting discussion isn’t around where the iPad currently places among its competitors, but about where it will be a year from now.

Related content from GigaOM Pro (sub req’d):

49 Responses to “Why the iPad’s 95.5% Market Share Means Nothing, Yet”

  1. Laughing_Boy48

    Face it, dude. These Android tablet chumps are just wannabes. I wonder if they even believe their own hype that they’re going to just walk in blow the socks off the iPad. Before the iPad hit the streets most of these copycats were extolling the multitude virtues of netbooks. When Apple had the iPad event most of them were calling the iPad a massive fail and thought Stevie was freebasing. Then what happened? Consumers starting buying the iPad like there was no tomorrow. Great big $$$ signs popped into those greedy PC vendors eyes. No way was Apple going to upstage them and they swore to throw some crap together on the fly without doing any research. Yeah! Let’s chop the keyboards off our netbooks and pass it off as an iPad replica with some added ports.
    Those stupid consumers will never notice the difference of us doing it on the cheap.

    Those PC vendor copycat suckers make me puke. Fronting about how their plastic 7″ tablets are way better than the iPad despite not selling one lousy tablet. They don’t know squat about what consumers want. Google told them to hold off with their smartphone OS tablets. But hell, no. Full speed ahead and Google and consumers be damned. I wish you article writers would at least wait until some these Android tablets get into the hands of normal consumers instead of some tech-head’s hands. Stop projecting about how Android will be the savior of all devices and put an end to the rise of Apple. A few years back, Apple was being declared ready to go out of business since they only had iPods holding the company together.

    Do you even know what a $51 billion dollar war chest could do to competitors. Apple could afford to slash prices for a short while and send most of those fools running for the hills. You clearly do not understand that Apple practically controls the flash memory market and probably the tablet display market as well.

    I agree that owning the tablet market before any other comparable tablets are around is rather silly, but for now that’s exactly how it is. It’s just like Android smartphones outselling iPhones. It doesn’t mean squat, but I’m reading about it every day. Even if Android tablets start to sell well, do you honestly think Apple is going to be mortally wounded. I think not. Smart people with money will continue to buy quality products instead of cheap ones.

  2. Or, the iPad market could turn out to be more like the iPod market, than the iPhone market.

    The iPhone launched into a market with VERY entrenched competition, where carrier relationships were critically important. The iPod didn’t. The iPad is not a subsidized device like the iPhone, it’s more like the iPod and can be sold at retail.

    Your iPhone killer analogy works even better when you go further back to the original killer, which was the iPod killer. You undermine your own point by choosing to ignore mentioning the first so-called killer.

    As for Android tablets, you pay extremely little attention to how those mfrs are going to drive down prices below Apple. Apple has all the leverage, they have all the economies of scale; how exactly are they going to source components at a lower price than Apple? Look at the tablets that have already hit the market, the Samsung. Samsung is possibly Apple’s best competitor. Their pricing their 7″ tablet at comparable prices to the iPad. That’s a non-starter.

  3. myonlinelifenow

    @DarrellEtherington

    Just wondering…when does “iPad’s 95.5% Market Share Mean” something? I find it funny that love ’em or hate ’em no one can really explain how or why Apple does so well when it comes to selling their “i” and “mac” products. Put an Apple in front of it, and doesn’t do so well. AppleTV anyone?

    So honestly what happens if Apple does become the de facto tablet maker like they are in the mp3 world? Nothing happens. Everyone makes alternative products and the world continues to turn.

    Move on..Apple rocks an you know it.

  4. I’m so tired of these ‘many manufacturers will beat Apple’ suppositions.

    Have we forgotten iPod?

    Apple went against Sony, Samsung, Creative Nomad, iRiver, Sandisk, Toshiba, LG, Microsoft etc. etc

    Some of them like Sony were huge with massive bankrolls and decades of music player experience (remember Walkman domination?), Sony even had deep music industry connections owning several record labels, Apple had never built a music player before and iTunes did not exist yet. If these guys couldn’t beat a relatively simple device like the iPod (with a relatively simple OS hardware mix) why do some think it’s going to be so easy to beat the iPad?

    “As soon as Android-powered tablets can find the right hardware mix, and refine production practices and parts sourcing to bring prices down, we’ll see a boom in business in their favor.”
    really?
    WHY COULDN’T THEY DO SOMETHING SIMILAR AGAINST THE IPOD?

  5. While I agree with your sentiment on tempering the notion of Apple having an insurmountable lead in tablets, I disagree with your declaration of 95% market share means nothing yet. Right now it means that Apple has the ability to price and distribute the iPad extremely effectively to the market. With its economy of scale, competitors cannot come close to challenging it on those two key points. Your comparison to the iPhone is erroneous as the iPad because pricing and distribution are completely different from tablets and PCs. Cell phones rely on a carrier’s network, subsidies from that carrier as well as their distribution networks in order to make it to the market. With this model, phones have a shelf life for only two years. Tablets do not fit this model, and Samsung will soon find out with the failure of the Galaxy Tab 3G. Apple has not only its own retail network, but also the world’s largest retailer- Walmart and third largest retailer- Target to push their tablet, let alone Best Buy. The iPod (particularly the Touch) is a better comparison to how the iPad should perform. Remember when it debuted this January critics decried it was just a large iPod touch. And whats worse is many of those critics were Apple’s competition. Microsoft believes the tablet is still full Windows OS based using a touch modification. Google still doesn’t know which direction it should go: is it a large phoneless phone (Android)? Or is it cloud PC computing via the web in Chrome OS? They are only in it to preserve the relevance of search for mobile. RIM and HP are the only companies that see what the future is, but can they make it to market in time to challenge the second iteration of iPad?
    The only way I see Apple losing its vast majority share in tablets if it fails to produce a better iPad next spring. And even then, it will has sold a HUGE amount tablets.

  6. Hamranhansenhansen

    Uh, Bell did pretty alright. If iPad is half the success of Bell your iPad Killer is due in 2100.

    Even now, they are no iPod touch killers, over 3 years after its introduction.

    Competing with iPad is more like competing with the Mac, because iPad is a PC. It’s just a mobile PC like an iPhone is a mobile phone. Only Microsoft was able to compete with the Mac and they had to leverage their DOS monopoly, plus IBM and Intel monopolies, plus license technology from Apple when they were under Pepsi management, plus leverage the inside access they got as a Mac applications developer, and even then they make something that is to mac as a Barnes & Noble Nook is to iPad: the best feature is it is half the price, even though it is 1/10th of the quality.

    Nobody is going to undercut Apple with cheap components. As with iPod and iPhone, they order massive quantities of the same exact components and use them in all of their minimalist product line. For the first 3 years of iOS there was just one 480×320 touchscreen. They bought about 100,000,000 of those. They use the same flash chips in iPod touch, iPhone, iPad, and possibly in MacBook Air.

    Here is an important point: Unix apps are made with C, Windows NT apps are made with C, Mac OS apps are made with C, iOS apps are made with C. Those are the 4 PC platforms. Everything else uses baby Java or Flash, they are not PC platforms. Apple has Keynote and iMovie running on iOS because they just had to port them, not rewrite them. To put a video editor on Android or BlackBerry you will have to create it from scratch.

    None of these so-called iPad competitors even has a full-size screen yet. A 7-inch screen is a jumbo phone, not a PC. Even the original Mac in 1984 had a 9-inch display. A 7-inch is half the size of a 10-inch, and crucially, it cannot show a full-size Web page in a readable layout, the user has to zoom in on elements, same as on other phones. With iPad, as on a Mac, you can read the Web without zooming. It’s a full-size system.

    So good luck with your giant phones. It is a shame to miss out on iPad. More and more, iPad users will be drinking your milkshake.

  7. Mark Hernandez

    (face in hands, shaking head)

    At least you’re consistent, Darrell.

    You give your articles a catchy title and then you say all kinds of stuff so your article is all over the map. Why does this remind me of politicians? People like Gazoobee and I are on to your schtick. Unfortunately there are always new people who fall for it.

  8. Umm, you realize that the Bell monopoly lasted for almost a century, right? Bell Telephone was founded in the late 1800s and was bought by AT&T in 1899. AT&T effectively controlled the national telephone system until it was broken up by the government in 1982. Just sayin’.

  9. Perspective

    Quoting John Gruber at Daring Fireball (daringfireball.net): “If only Bell had managed to create a massive monopoly that lasted a century and ended only when the government broke it apart.”

  10. AlleyGator

    The critical question you want to ask is: if everybody wants iPads, can Apple make enough to satisfy demand?

    That’s a super-important question. I’d argue that the rise of Android is directly aided by the fact that Apple can’t produce 40-60 million iPhones in a quarter and can’t distribute on 75% of all major carriers. Having captured the public’s interest, they failed to meet demand and left a ripe market for competitors and imitators.

    Will the same thing happen with iPads? This is the true weakness of Apple, in my opinion. Even for the best industrial engineers in the world, it’s tough to produce a hundred million units of ANYTHING by yourself.

    Having too many customers is usually a good problem to have, but with strong lock-in factors on the table (A still-emerging market for paid Android apps is on the horizon) having customers adopt your competitors impacts your earnings in a big way.

  11. Wait, the fact that tablets existed for years, but were lousy–until the iPad–means that we should ignore them? So, Apple created this new market and it means nothing that they dominate it?

    What? Don’t they teach logic anymore?

    Why did you pick Bell as your example? I seem to remember a massive telephone monopoly by that name…

  12. I can only quote John Gruber’s response to this on Daring Fireball:
    “If only Bell had managed to create a massive monopoly that lasted a century and ended only when the government broke it apart.”

    ’nuff said.

  13. “The situation is similar to (but not the same as) that faced by other device manufacturers when the iPhone was first introduced. Like the iPad, the iPhone was widely embraced by tech enthusiasts and consumers for its ease of use, design and App Store.”

    …except that the App Store wasn’t launched until July 10, 2008, versus the June 29, 2007 release date for the first iPhone. Yes, the App Store is a *huge* factor behind the iPhone’s success, but your sentence makes it sound like it was a large component of the device’s initial success, which it was not.

  14. “Right now, claiming that Apple is dominating the tablet market is a little like saying Alexander Graham Bell dominated the telephone industry in 1876.”

    Um… Bell had essentially a monopoly on phone service in the US until 1984 when the government broke it up.

  15. Synthmeister

    The problem you are overlooking is why couldn’t anyone come up with a decent tablet over the past 10 years? Nothing has really changed for Apple’s competitors. Apple has spent tens years developing extremely efficient, portable, powerful and intuitive mobile OS, apps, delivery/sync and hardware system. Their competitors haven’t laid that foundation. On top of that, Apple already has the entire ecosystem in place–the retail network, the peripherals, the developer pool, the Podcasts, largest online media store, e-books and apps. Also, Apple doesn’t have to futz around this time with the neanderthal telcos and their artificial barriers and limitations. Notice how Apple didn’t wait to cut a deal with the telcos in China for the iPad? Notice how Apple made Facetime completely independent of the telcos?
    Finally, haven’t you noticed how Apple is going for the pricing jugular on this device? No one can come up with a 10″ tablet for $499 that is anywhere close to competing with the iPad. Apple can already secure component deals for the iPad knowing they will sell 10s of millions of units. And besides that, many major components are shared with the iPod touch, the iPhone AND the AppleTV, further reducing the costs. Yet Apple’s competitors can’t really bet on selling 10 of millions of units of their iPad wanna-bes.

    The fact that the iPad was announced NINE months ago, is already selling better than the Mac, yet no one has a 10 inch tablet competitive with the iPad is astonishing.

  16. We haven’t seen the “perfect” tablet for business yet:
    Google: Android 2.2 ‘not designed’ for the tablet form factor

    Google Chrome OS is an open source, lightweight operating system that will initially be targeted at netbooks.

    iOS has consumer applications ported to a touch interface.
    Spreadsheets are still accounting tables not optimized for touch, just as an example. Zooming, in that case should/could be business process related and not font related.

    Neither has Google any business application optimized for touch or mobility. Having apps/files stored in the “cloud” doesn’t make app suited for mobile business. It just makes them more accessible(sometimes), which helps but is still a kludge.

  17. Matthew Frederick

    “Right now, claiming that Apple is dominating the tablet market is a little like saying Alexander Graham Bell dominated the telephone industry in 1876.”

    Sure, but for how there were, what, 14 telephones? Unlike the 14 million iPads in the first half-year.

    Apple certainly won’t have a Bell-style monopoly a few years from now but their lead is incredibly strong.

  18. I think why this argument is apt has to do with the nature of current iPad usage. Having just been interrupted by a conversation about iPad users and their needs, only reinforces my opinion. What do people do with them? There is a vast range of usage styles. This will prove beneficial for Android tablets.

    Android will have a lot of vertical attention. Applications don’t always need the refinement of a full OS as with iOS. They may only need a small segment of interaction patterns.

  19. “Tablet” is in need of real definition. the issue is that an Ipad has many features, such as instant on, which are some of the real joys of using it. Compare this to a windows 7 device with minutes of boot time. Also, Apple does wonders with the small cpu and ram allocation. Running win7 on the same specs would be atrocious. There needs to be a definition set as to what the new tablet space is really all about. I would not even consider a full blown OS on a tablet device as a viable tablet device – its just a hacked around netbook.

  20. Actually the 95% market means Apple sold millions of iPads and if you take the time to look at the recent qtr reports from the likes of ASUS or other Netbook makers, these sales affected their markets. So to say it doesn’t matter because somebody will make something next year is foolish. Guess what. Apple will make a new iPad next year and I will predict it will outsell all the tablets you mention. Will they get 95% next year, doubtful and then someone like you will point out how Apple failed because they now only have 80% share and Android grew from 0- 20% in a year vs Apple dropping from 90% to 80%. Then we can look at who made any money and guess what Google sells ads and makes more money via Ads on the iPad then all the other tablets combined

  21. Darrell, you’re entitled to your own opinions but not your own facts. The fact is that Apple didn’t create the tablet segment any more than they created the MP3 player segment. Apple, for “all intents and purposes,” didn’t create those segments at all. What they did was realize that the current competitors in those segments were terrible and they (Apple) could successfully compete in those segments. What they did was make a superior product such that people flocked to it.

    Microsoft is the most successful software developer in the history of the world. Yet, try as they might, they were unable to get out a successful product with 10 years of attempts. From your picture you look like you might not remember 10 years ago, but tablets were Bill Gates’ dream. Yet, no matter how many billions of dollars and developer hours he threw into it, Microsoft failed to succeed, year after year after year.

    Many years ago, the manufacturers of music synthesizers with names like ARP and Sequential and Oberheim and Moog produced expensive, limited instruments. Yamaha came out with an incredibly powerful and relatively inexpensive instrument and literally put them into receivership overnight. They couldn’t compete even though they created the market.

    It’s the same situation with tablet computing. Those are the fact, sir, and you can come up with your agenda-driven interpretation of those facts–you can even deny them–but that only make you and this blog look sillier than it is.

    • You could also add Google and search engines to those facts. Google also had it’s revolution in that market. Competitors didn’t realize it til it was too late. Google had a superior product so everyone used it. The followed with some cool and innovative web services and are very good at some of them. While google’s success is mostly thanks to revolutionizing the web after the dotcom story, android doesn’t fall into that category. Android is a product set for an industry which has just been revolutionized. And it was apple’s revolution. Now that sounds like a hard nut to crack.

      So do they reinvent the concept or add something new and innovative or just copy?
      In the background you can hear E. Schmidt yelling: “get it out! Now!!”

      So they loosely copied and hoped for the best. Added some fancy web services to the mix and some slogans with “open” – the main weakness of their competitor.

      That kinda started falling apart when hardware manufacturer and carriers had other plans for android.

      Just a thought.

  22. Gazoobee

    This article is almost completely empty of content.

    If GigaOm was going to pick up a writer from “the AppleBlog,” why did they pick the worst one? This guy has a long history of boring, poorly written, stupid articles that don’t have any real content or insight.

    • Agreed. One hundred Percent. Just trying to get more people click on an article because it has a catchy title might help the author in the short run. But in the long run, people wouldn’t come to the site itself.

      It is just a rambling of non-sensical, no factual data.

  23. Stephane

    Like Tom Reestman already said, they were other tablet already on the market and other came to the market at the same time (JooJoo). But although the market will change a lot next year with all the Android/Win tablet coming to market, one thing that is true is that the iPad does dominate the market right now.

    We can’t forget that the 100% market of tablet last year has been reduced at 4.5% this year, so Apple did sell 95% more iPad this year than any other manufacturer did last year, so yes I think that a market share % that means something.

  24. IPad competitors have to do more than “find the right hardware mix.”

    They also have to find the right OS, since Google already has said that cuurent Android versions are not designed for tablets. Also, Google is developing a second OS, Chrome, which purportedly is for tablets. So which Google “tablet” OS should buyers consider? Why risk support for either, when one probably will not be used for tablets in the long run?

    Why do writers consistently ignore these facts when writing about Android tablets? It comes directly from Google.

    Alternatively, we have Windows 7. Tablet shoppers have to ask themselves if they really want a tablet running a desktop OS with ill-fitting touch capabilities grafted over top of sofware originally designed to be used with a computer mouse. and why should anyone support potentially unreliable, next-generation software from the company that brought viruses and malware to the world?

    Add to this list unproven, experimental OS options from RIM, Samsung and Nokia and the reality is this: as usual, Apple’s pioneering and elegant solution is the only real choice, at least until H-P’s WebOS ships on a tablet. Now THAT might be the first real competitor to the iPad and iOS.

  25. Ashutosh Singh

    The Problem with other players is that everybody is going to reactive to iPad, that means everyone will compare the new tablet with iPad, that is advantage iPad had there was never a big player for tablet area and now iPad is filling it. I always welcome competition it’s always good for consumers, but the only problem with other companies is that they don’t make great products they just depend on Marketing whereas apple never gives a small bit in any area whether it’s marketing or creating a great product.

  26. This article ignores that there were a decade’s worth of tablets before the iPad. Why didn’t the Alexander Graham Bell telephone analogy apply to THEM? Being first doesn’t inherently mean squat. A product is either right or it’s not.

    As for “the weight of Google”, that weight has already stated the current Android OS is not good for tablets. Some weight. Giving Google credit when they don’t yet have a viable tablet OS—and RIM credit when their trackball OS is already failing in a world that wants touch on smartphones—is inventing competition that doesn’t yet exist.

    I know the technorati really want competition in the tablet space, but it can’t be generated from nothing. They need to call out the latest entrants for what they are: wild attempts at marketing-checklist hardware to get something (anything) out there. Patting them on the back as if they’ve got a shot doesn’t help the race to build a better tablet, it simply encourages mediocrity.

    • There was a decade worth of tablets that nobody wanted to use, except those who had to at work. They were expensive, cumbersome, and had patched together software and OSes not designed for touch or pen input.

      For all intents and purposes, Apple created this segment. Or at least brought it to the non-specialized buyer.

      • The main problem is that you are compering the iPad to the iPhone instead of the much more analogous iPod.

        The iPod also entered an existing but unpopular digital music player market (Diamond Rio etc.) and made the digital music player category its own. But in-spite of supposedly “good enough”, “open” competitors like “Plays for sure”, later Zune, and now Android, iPod market share hasn’t budged — it is still 70%+.

        Please explain how and why the iPad won’t settle into a 70%+ market share for the long term?

        Hint: The iPod didn’t represent an existential threat to PC makers/Microsoft the way the iPad does.

        Unless they are all completely brain dead, they will try harder to compete against the iPad then they did the iPod. The problem with that straw for the drowning PC makers is that they are depending on Google to bail them out with a working tablet OS, and unlike them, the iPad does not represent a threat to Google — iPad users will use Google more than enough to generate plenty of revenue for it. So Google doesn’t have a big incentive to invest too many resources into tablet versions of Android and/or Chrome OS.

      • David Brown

        Immediately after the iPad was announced, the refrain was “The iPad is not original, there have been Windows tablets for years.”

        Now you are insisting that the market that iPad is leading didn’t exist before the iPad, and that because there are no credible competitors yet, we cannot say that the iPad is the leader.

        That seems rather convenient. It’s not a very useful technique, as it is always possible to define your set of interest to serve your own purposes.

        The reason you use to restrict your definition (which I will rephrase as “the other tablets sucked”) is also exactly the reason that a reasonable person would use to describe the market leader.

        If another tablet (let’s call it StupendousPad(tm)) came along that bested the iPad by the same amount that the iPad bested the other tablets, would you define the market as not having existed before this mythical new StupendousTab(tm)?

      • punkassjim

        I’m glad you mention the “tablets that nobody wanted to use, except those who had to at work.” Because you’re also the one who pointed out that the Blackberry PlayBook “will be popular among enterprise customers” and the HP Slate is “poised to grab a piece of the action”. I’m so very curious to see how enthusiastic the enterprise customers turn out to REALLY be with one tablet that’s built completely on Adobe Air as an OS, and one tablet that has a dedicated CTRL-Alt-Delete hardware button. Not to mention the various disparate others.

        I have every confidence that Enterprise purchasing managers who’ve had no opportunity (or are constitutionally opposed) to ever touch an iPad will find plenty to be giddy about for a month or two with the Playbook or Slate, and then they’ll all decay in the dusty drawer of history. Just like the tablets of the past decade. Meanwhile, the iPad will just casually plod along in its finely polished path, selling at an incredible rate in the consumer space.

        Now, the thing that’s blowing my mind right now is that seven MONTHS after the first iPad sales went off the charts, Google still has no Android Tablet OS baseline spec. Why does everyone seem so unbelievably caught off-guard by Apple?

    • PRETHOUGHT

      LMAO Google doesn’t have a viable smartphone OS let alone tablet OS. But it’s like Windows you use it and get past the blue screens of death or in Android’s case the Force Close. Most people find crap acceptable. Which is fine it’s a free country. But also like Windows it gets better over time. With each iteration Android becomes less crappy than the last.

      RIM has a track record of making rock solid smartphones albeit geared towards messaging with tight big brother control with BES. Which is what makes the Playbook a contender in the without having shipped one out the door.
      The enterprise is already comfortable with Blackberry devices.

    • “This article ignores that there were a decade’s worth of tablets before the iPad.”

      And the only thing that decade’s worth of tablets proved, was that resistive screen tablets using a stylus are neither fun nor magical.