Tablet Sales, App Revenues To Soar As Android Ascends

by Steve Smith, Mar 13, 2013, 9:37 AM

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The tablet market in every respect is poised to explode in coming years, according to separate industry forecasts released this week. The ecosystem around the market once owned by Apple’s iPad will diversify and become more lucrative for app developers. According to IDC's latest tracking reports, earlier estimates of 172.4 million tablets to be sold worldwide in 2012 have been revised dramatically upward to 190.9 million. The smaller sizes and lower prices are driving the market, with about half of tablets sold in the most recent quarter smaller than 8 inches, IDC found.

While iPad Mini sales are brisk, the long-languishing Android tablet market is the main beneficiary of this growth. The Google operating system in its various flavors will capture 48.8% of the tablet market this year, with Apple's share finally falling beneath the majority mark, to 46%. Windows is having a marginal effect on the market thus far, in part because it has divided its device releases between Window and Windows RT versions. Regardless, IDC does not see Microsoft taking more than 5% of the market this year or much more than 10% by 2017. They forecast that Google will continue to nibble away iOS market share until 2017, when Android tablets will own 46% of the market against iOS’s 43.5%. Compound annual growth rates for both major tablet markets will be about 15% between 2012 and 2017.

As for the app economy, ABI Research also reports that revenue for tablet developers will reach $25 billion this year and amount to 35% of the overall device app market. This puts tablet apps on an upward trajectory to match smartphone app revenues by 2017 and exceed it by 2018. ABI senior analyst Aapo Markkanen says that the economics of the tablet for developers are compelling because the larger screen simply makes for broader and more lucrative monetization opportunities. Lower-priced tablets are only starting to make their effect felt on the market, he adds. And despite the massively larger installed base for smartphones, “it’s the tablets that will prove the more transformative device segment of the two,” he argues in the report.

The tablet will help open up new opportunities, especially in the under-served computing markets -- namely the elderly and children.

Echoing the revenue dynamics on smartphones, Android’s device share dominance does not necessarily amount to app revenue superiority. ABI attributes 65% of the app revenue from tablets to iOS devices in 2013, compared to 27% from Android.  

 

 

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