Two years after creating the market, Apple remains the king of all media tablets, with its global market share rising to nearly 70 percent in the second quarter, putting the company on pace to reclaim much of the dominance it surrendered in 2011.
Apple during the second quarter shipped 17 million iPad 2 and new iPad media tablets, up a stunning 44.1 percent from 11.8 million the first quarter, according to IHS iSuppli. This industry-leading increase in shipments translated into a market share gain of 11.5 percentage points, as Apple's second-quarter global tablet share climbed to 69.6 percent, up from 58.1 percent in the first quarter.
This marks a five-quarter high for Apple's media tablet market share. The last time Apple accounted for such a large portion of the media tablet was the first quarter of 2011, when it had a 70.0 percent share.
"Apple is making all the right moves to rebuild its dominant position in the tablet space," said Rhoda Alexander, director, tablet and monitor research for IHS. "The company is pushing visual performance boundaries with the new iPad, while providing value customers with a lower-priced alternative, the iPad 2. With the expected entrance of the 7-inch version of the iPad in September, Apple is sending a clear message that it plans to dominate this market over the long term. Apple's major media tablet rivals, Google and Microsoft, hope to challenge Apple in the second half of the year, but will be facing formidable headwinds with no sign that the market leader is backing off of its aggressive strategy in the market."
New Entrants Add Spice
"A major component of Apple's success to date is the company's well-developed ecosystem of content and applications it had in place before entering the tablet market, and its absolute control of the hardware, software and operating system," Alexander noted. "When a customer buys a media tablet, what he or she is really doing is purchasing a key to that ecosystem, not just a piece of hardware."
Competitors have found it very difficult to duplicate Apple's approach. This, however, has left an obvious opening for 2012's newest market entrants: Google with the Nexus 7, and Microsoft with its Surface products.
Both firms have invested heavily in ecosystem development of their own during the past several years. While this investment benefits the Android and Windows original equipment manufacturer (OEM) partners of both companies, it is not surprising to see Google and Microsoft, respectively, test the waters with media tablets of their own, especially given Apple's prolonged stranglehold on the fast-growing market.
"It's possible that each of these vendors is entering the market intending to lead by example, rather than trying to be serious branded tablet competitors," Alexander said. "However, they both have the potential to end up as major players even if their original intent was only to demonstrate how it could be done. Microsoft in particular will be one to watch, with its existing Xbox gaming community on the consumer side and its operating-system dominance in business markets."
