Stay on Top of Emerging Technology Trends
Get updates impacting your industry from our GigaOm Research Community
Apple (NSDQ: AAPL) has all but cornered the market for tablets in the U.S., say researchers at Forrester, who predict that its iPad will take 80 percent of all tablet sales this year in North America.
But that’s not entirely the case in Europe, it seems.
There, Apple will take a mere 70 percent of the market this year, with competitors gaining a bit of advantage because of Apple’s smaller retail presence, and slightly less lionized reputation in the region.
A 70 percent market domination in Europe may not sound much more encouraging than an 80 percent market share in the U.S., but Europe itself is still shaping up to be a key battle ground simply for its size. In 2011, Forrester believes that Europe will account for one-third of all consumer tablet sales worldwide, making it the second-largest regional market in the world. Overall, the researchers believe that 48.2 million tablets will be shifted this year. In addition to 30 percent in the EMEA region, 50 percent of sales will be in the U.S., 15 percent will go to Asia Pacific, and 5 percent will be sold in Latin America.
Retail muscle. One of the key reasons for Apple’s reduced proportion will be because of its retail presence. Forrester points out that while the U.S. has 238 physical Apple stores, with another 19 in Canada, there are only 52 across all of Europe, with more than half of those (30) concentrated in the UK. Some countries like Poland even lack online stores, let alone physical retail shops.
But while Apple may not be as strong in retail, there is another group that is: mobile operators. They not only sell devices like the Samsung Galaxy Tab at big subsidies bundled with network contracts, but some have also started to partner with OEMs to offer own-branded devices, such as the Orange Tablet. While all of these operators, of course, also sell the iPad (and sometimes in its own hallowed space), the iPad is nevertheless competing for shelf space more directly with these other products.
Untapped market. Forrester conducted an online survey of nearly 14,000 people across France, Germany, Italy, Netherlands, Spain, Sweden, and the UK. What it looks like the researchers found was that the market is still very small — in France, for example, tablet penetration is a measly two percent — but that the opportunity, going on customer intent, is a pretty good one, with between 10 and 14 percent of respondents saying they would like to get tablets:
Lingering problems. The challenges in Europe, as outlined by Forrester, are not really that much different from those in the rest of the world. Chief among them is price, with competing tablets selling for upwards of €400 ($570). While this is the same price as that of an iPad 2, these products, most of them built on Android, significantly lack enough cache to compete at that point. Retailers think typical prices should instead be between €150 and €300, notes Forrester. That’s before payments for 3G contracts are factored in.
Add to this the current economic climate, which will be more of a force as tablets move beyond higher-earning, early adopters and look for customers in the mass market. Forrester notes that in Europe, the tablet market is skewed to younger people, who tend to also be in lower income brackets.
There is also the issue of supply, with the natural disasters in Japan affecting the rate of manufacturing and the prices for components.
What Forrester author Sarah Rotman Epps pointedly does not name in her research are potential marketshare winners, be it Samsung or RIM (NSDQ: RIMM) or Motorola (NYSE: MMI). What she does note is that low-cost Asian players (for example Huawei, ZTE or someone with no profile at all) could come in not on the strength of their brands, but on low pricing on decent products. That effectively means the market is still wide open with no clear and obvious challenger making a play yet for that remaining 30 percent that Apple will not manage to get.