Tablets Set For Blazing Q4, Lit By Amazon Fire, iPad
After missing expectations in Q3 sales, tablets are expected to come back as Amazon, Apple and Barnes & Noble drive the market, says IDC Worldwide. The market research firm says tablet sales in Q3 were up sequentially 23.9% worldwide, representing 18.1 million units. It had expected 19.2 million units sold.
Still, the year-over-year growth in this platform is a staggering 264.5% compared to Q3 2010. IDC says the availability of more and cheaper models in the space will drive the market this holiday. Its projection for full-year tablet sales is being revised upward to 63.3 million units, up from 2.5 million.
For now it remains an iPad-dominated world. Apple commands a 61.5% market share in Q3, down from 63.3% in Q2. The next-largest seller Samsung, had but a fraction of Apple’s sales, with a 5.6% share. HP’s brief Playbook appearance netted a 5% share in the end. And the Barnes & Noble Nook Color had a 4.5% slice.
With the expansion of the tablet market into 7-inch offerings from Amazon and B&N, the terrain will change considerably, says Tom Mainelli, research director, Mobile Connected Devices, IDC. While fragmented across some heavily modified and relatively closed versions, the Android OS will move from a 32.4% share of the tablet market in Q3 to a 40.3% share.
This will not be a direct threat to Apple’s market because IDC sees the low-priced 7-inch products appealing to a different buyer.
“The Kindle Fire at $199 and the Nook Tablet at $249 appeal to different tastes and consumers that likely aren’t ready to spend $99 or more on a device that is not a replacement for their PC,” says Mainelli. “When Amazon announced their price of $199, it not only gave consumers more of a pot to jump into, but consumers could feel OK about buying a device they wouldn’t use at work and wasn’t a replacement for a PC."
Mainelli says that the apparent success of the Fire and Nook Tablet demonstrate that there is a market for tablets outside of the iPad. Amazon announced today that its entire Kindle line is selling over 1 million units a week, although the retailer did not specify what share of those Kindles were Fire models.
Likewise, Barnes & Noble says that its Tablet is the fastest-selling Nook model it has released. Despite competition from the low end, IDC is predicting that Apple will have its best quarter of tablet sales ever.
Price has become a big driver in the tablet market, IDC finds. The major challenge for the Android market comes when Amazon introduces, as many expect, a larger tablet in 2012. If they enter the 10-inch screen space with the same aggressive pricing and offer a $349 or $399 price, it forces the rest of the field to scramble, says Mainelli. “They would make life more difficult for the Android media tablet guys.”
Amazon and Apple have content businesses that help support their hardware sales, while Samsung, Motorola and Asus do not. “The hardware-only guys need to figure out that it's probably not going to be a high-margin business and they need to tap into a successful ecosystem.” Mainelli speculates that the OEMs may partner with Amazon to get some piece of the media sales business.