Apple Dominant in Tablet Space

The iPad, introduced by Apple last year, is the front-runner among tablet computers, which rank on the tech gadget scale somewhere between smartphones and laptop computers. That is, tablets are bigger than smartphones but smaller than laptops. The iPad 2, for example, has a 9.7-inch screen and weighs only 1.3 pounds. Laptops weigh from 2 to 7 pounds.

Tablets also differ from laptops in that they are touch-screen devices that don't come with a keyboard or mouse. Their design calls for users to type or do mouse-like selections directly on the screen.

Apple broke into the lead in the tablet space with the introduction of the iPad in April 2010 and sold 14.8 million of the devices by the end of the year. Competitors rushed to respond but have struggled to gain much traction, even with recent price cuts.

Apple's sales, meanwhile, have surged. The company sold 9.25 million iPads during its fiscal third quarter, which ended June 25. That's up from 4.7 million sold during the company's second fiscal quarter. The introduction in March of the iPad 2 fueled the near doubling in sales.

Increased competition over the past year has chipped away at Apple's market share, which once hovered over 90%, but the company remains the dominant player, with the iPad and iPad 2 combining to control 66% of the market in the first quarter of calendar 2011, according to a report released in July by research firm IDC. Devices running on versions of Google's Android operating system claimed 34% of the market, but of the swarm of iPad rivals that have been released, only the Samsung Galaxy Tab can claim a double-digit market share, at 12%, said Bob O'Donnell, IDC vice president-Clients and Displays.

"The rest is just noise," he said.

Look for the rapid growth of the tablet market to continue, with the iPad leading the way. IDC on July 8 bumped its projection of 2012 tablet sales to 53 million, from a previous prediction of 50 million, despite a slightly slower than expected first quarter. As for next year, IDC projects that consumers will buy 80 million tablets.

Neither Apple nor IDC provided a sales breakdown between the original iPad and the iPad 2. O'Donnell did confirm, however, that the iPad 2 has emerged as the No. 1 selling tablet.

The operating system Apple uses on the iPads, iOS, did lose 8 points of market share to Android devices from the fourth quarter of 2010 to the first quarter of 2011. So, does IDC foresee Apple losing its market share lead as the tablet market continues to expand in 2012?

"No, we don't," O'Donnell said. "We see (competitors) will continue to challenge Apple as a share of the total, but iOS will remain larger than Android."

For more on the tablet market, including capsule profiles of selected tablets, see the online version of this article on journalofaccountancy.com.Enter 20114361 in the search box to find the article.