The Worst Argument for Apple's (AAPL) Slipping Tablet Market Share
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Warning: The following argument may be more subjective than objective, just like the original article.
According to IHS iSuppli, Apple's (Nasdaq: AAPL) biggest competition in the tablet market was itself last quarter. That is a true statement. Apple sold 15.43 million iPad and iPad 2s last quarter, which was a significant increase over the preceding period.
However, despite Amazon (Nasdaq: AMZN) saying sales of its Kindle Fire were strong, IHS believes the iPhone 4S -- which debuted last October -- was the biggest constraint on tablet shipments. We're going to harumph that statement.
Did Apple's share of the overall tablet market slip? Yes, it fell to 57 percent in the fourth quarter of calendar year 2011 (Apple's fiscal first quarter of 2012). IHS also noted Amazon sold 3.89 million tablets for 14 percent share.
Saying people skipped buying an iPad or iPad 2 in lieu of a iPhone is pretty drastic. Normally spot-on with analysts, IHS might have missed the boat on this one. To the firm's point, previous studies have shown that if a consumer is planning on buying an iPad, they weren't lured away for the lower-cost Kindle Fire or other alternatives by Barnes & Noble (NYSE: BKS) and Samsung. There's a difference between the iPad and many of its competitors, with price being a lower factor for an overall decision.
Apple actually beat a lot of analyst estimates on iPad sales even with the iPhone decimating all of the Street's expectations with 37 million units sold. Additionally, analysts expect Apple will lose tablet market share as competitors continue to enter the market. Many have Apple pegged at 40 percent to 50 percent share in 2013 to 2015 (even IHS, we believe).
Most likely, many are waiting for the iPad refresh, which is expected to happen very soon. Saying many were holding off on an iPad to buy an iPhone instead is like saying someone is going to eat chocolate cake instead of a porterhouse for dinner...they're both food but from completely different categories and never really in comparison.
With many subsidies placing the cost of the new iPhone anywhere from $200 to $300, a better comparison would be lower than expected sales of Amazon's Kindle Fire. At $199, the Fire is at least in the same price range. A tougher choice would be between the iPhone and Fire, or iPod touch and Fire. With the iPad and iPhone its calls versus no calls, big screen or portability, reading versus playing games.
Shares of Apple are down 1.4 percent on the session, following a surprising reversal and close lower Wednesday.
According to IHS iSuppli, Apple's (Nasdaq: AAPL) biggest competition in the tablet market was itself last quarter. That is a true statement. Apple sold 15.43 million iPad and iPad 2s last quarter, which was a significant increase over the preceding period.
However, despite Amazon (Nasdaq: AMZN) saying sales of its Kindle Fire were strong, IHS believes the iPhone 4S -- which debuted last October -- was the biggest constraint on tablet shipments. We're going to harumph that statement.
Did Apple's share of the overall tablet market slip? Yes, it fell to 57 percent in the fourth quarter of calendar year 2011 (Apple's fiscal first quarter of 2012). IHS also noted Amazon sold 3.89 million tablets for 14 percent share.
Saying people skipped buying an iPad or iPad 2 in lieu of a iPhone is pretty drastic. Normally spot-on with analysts, IHS might have missed the boat on this one. To the firm's point, previous studies have shown that if a consumer is planning on buying an iPad, they weren't lured away for the lower-cost Kindle Fire or other alternatives by Barnes & Noble (NYSE: BKS) and Samsung. There's a difference between the iPad and many of its competitors, with price being a lower factor for an overall decision.
Apple actually beat a lot of analyst estimates on iPad sales even with the iPhone decimating all of the Street's expectations with 37 million units sold. Additionally, analysts expect Apple will lose tablet market share as competitors continue to enter the market. Many have Apple pegged at 40 percent to 50 percent share in 2013 to 2015 (even IHS, we believe).
Most likely, many are waiting for the iPad refresh, which is expected to happen very soon. Saying many were holding off on an iPad to buy an iPhone instead is like saying someone is going to eat chocolate cake instead of a porterhouse for dinner...they're both food but from completely different categories and never really in comparison.
With many subsidies placing the cost of the new iPhone anywhere from $200 to $300, a better comparison would be lower than expected sales of Amazon's Kindle Fire. At $199, the Fire is at least in the same price range. A tougher choice would be between the iPhone and Fire, or iPod touch and Fire. With the iPad and iPhone its calls versus no calls, big screen or portability, reading versus playing games.
Shares of Apple are down 1.4 percent on the session, following a surprising reversal and close lower Wednesday.
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