Apple entered the small slate market with its iPad mini but less expensive Android tablets are poised to soon surpass iPad sales. So says IDC, which on Tuesday released a quarterly update to its Worldwide Tablet Tracker report. By the end of 2013, IDC says, Android tablets will take 48.8 percent of the market compared to 46 percent for Apple’s iPad. That, of course, doesn’t leave much room for Microsoft Windows tablets.
The two factors driving Android’s tablet rise are costs and size. Apple’s iPad starts at $329 for a 16 GB Wi-Fi model while tablets with similar hardware running Google’s Android software can be had for half that cost. It’s a valid argument to suggest that consumers may get a better experience with the more expensive iPad, but if $329 isn’t in a consumer’s budget when tablet shopping, a lower-priced Android may land in the shopping cart.
Apple was also a little late to the small slate market. Decent Android tablets sized at 7 inches were available as far back in 2010; a time when Apple publicly squashed the idea of a tablet in this size. We all know how the company changed its tune: After reading articles and reader comments on the merits of a 7-inch tablet, Apple executives realized there was indeed a market for these. And in late 2012, the iPad mini arrived, with its 7.85-inch screen.
IDC’s data suggests that one in two tablets shipping this quarter are 8 inches or less in size, confirming a recent report from Display Search. The research firm that studies display panel shipments — and the implications of those numbers — says the iPad mini will outsell larger iPads this year. IDC Research Analyst Jitesh Ubrani echoes the usability of small slates that I noted in 2010: “Vendors are moving quickly to compete in this space as consumers realize that these small devices are often more ideal than larger tablets for their daily consumption habits.”
Where does that leave Microsoft Windows tablets? IDC doesn’t hold out much hope for Windows RT, forecasting a dismal 2.7 percent of the tablet market by 2017. I agree with IDC here because tablets running the full version of Windows 8 with the same battery life as RT devices can be had for nearly the same price. There’s simply not a huge market for Windows RT without a drastic price drop in the devices.
Windows 7 and 8 tablets, however, should eke out some gains over Android and iOS tablets over the next five years, says IDC. These could account for 7.4 percent of the tablet market by 2017. If Microsoft continues to evolve the platform at the same time hardware improves, I think 10 percent (or more) of the market is actually possible by then.
Ultimately, Apple doesn’t care about its overall market share provided it continues to rake in massive profits. That’s a good strategy, but I’m curious to see how the sales mix of iPads and iPad mini devices affects Apple’s profit margin in tablets. Surely the ASP, or average selling price, will decline due to the lower-priced iPad mini. Can Apple make it up in volume?