Android eats into iPad sales in 2011

According to iSuppli, Apple's market-defining media tablet suffered a market share setback in 2011, dipping from the spectacular 87% share it held in 2010, down to 62% in 2011, a 29% drop year on year. This will probably come as a surprise to nobody since the iPad was the tablet market for all intents in 2010, Apple having reinvented the category much as it did with the iPhone.

The decrease in market share can be attributed to many factors, mostly increased competition from Android powered devices but also from other non-Android players, a number of whom actually lost money - something that is surely foreign to Apple. However, the biggest hit occurred in the final quarter when the Amazon Kindle Fire made its debut. During that quarter, the iPad's share dropped to a sobering 57%, something that Apple's management were at pains to downplay during their quarterly financial reporting, claiming that they were unconcerned about the Fire's effect on iPad market share.

Amazon's Kindle Fire went from zero to 14.3% market share in its first quarter, a stunning start particularly in light of it being available only in the US. There's little doubt that the Fire was a major factor in taking market from the iPad, but considering the size of Apple's drop in tablet share, there are obviously other factors at work. Samsung, for example, took 9.4% of the market for the whole of 2011, while the Kindle Fire grabbed a respectable 6% for the year despite only selling for a single quarter. Extrapolating that success for a full year suggests that the Fire is capable of something like a 25% share on its own for 2012 with its international rollout now underway.

iSuppli are reporting also that Apple's iPad is vulnerable to cannabilisation from the company's other products, specifically new release iPhones, and has attributed at least some of the iPad's poorer than expected showing to the iPhone 4S soaking up holiday season dollars from the Apple faithful. If so, then Apple can expect to see this repeating yearly as that's the update schedule Apple has previously committed to with its iPhone launches.

Despite the iPad's market share fall, there is no question that it remains by far the preferred media tablet, with lackluster results posted by most of its competitors, Android or otherwise. It appears to the casual observer that there are in fact two markets here - the iPad market and everybody else. With a little anecdotal experience, it would seem that a significant number of consumers don't want a media tablet at all. They want an iPad, and only when put straight that "it's an Android media tablet" that the observer understands that such things even exist. As stated, anecdotal. Yet, it's not an unrealistic scenario.

Which brings another point - the Q3 release of Microsoft's Windows 8 based OS on ARM-powered media tablets. While the potential uptake cannot be known at this point, it seems clear that their potential user base be neither Android nor iOS users. Instead, their market will presumably be the untapped tens of millions who have yet to fall into the camps of the current contenders. But the question remains, is there actually a demand for a device that really isn't understood by most despite having Windows 8 installed on it? The jury is very much out on that.

Source: iSuppli