Apple's iPad carves 95% tablet market, competition is dust

Apple's claim to have invented the tablet category seems vindicated by news this morning from Strategy Analytics which claims Apple grabbed 95 percent of the global tablet market in Q3 2010 -- even as the company plots its path to iPad 2.0.

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There have been previous efforts at tablet computing but these have been abject failures in comparison to Apple's achievement with the iPad. And while competition within this segment seems set to ramp-up pretty soon, Apple already has the iPad 2.0 waiting in the wings for introduction in Q1 next year.

Citing global tablet shipments reached over 4 million units in the period, Peter King, Director at Strategy Analytics, said,

"Global tablet shipments grew 26 percent sequentially to reach 4.4 million units in Q3 2010. Apple was the clear market leader during the quarter, capturing an impressive 95 percent share with the iPad and beating Android into second place."

In a press release, Neil Mawston, Director at Strategy Analytics, added,

"The tablet wars are up and running. Apple has quickly leveraged its famous brand, an extensive retail presence and user-friendly design to develop the tablet segment into a multi-billion-dollar global business."

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He adds, "Android, Microsoft, MeeGo, webOS, Blackberry and other platforms are trailing in Apple's wake and they already have much ground to make up."

Catch-up indeed. As component shortages impact the smartphone sector, so too will these impact against the tablet industry, where multiple players will be deploying Android OS and other OS-powered offerings.

Apple's decision to introduce its tablet at as low as possible a cost is justified by this, as it means competitors must work hard to emulate the Cupertino firm's offering on price.

Samsung is seemingly emerging as the most likely competitor. The Android-powered Samsung Tab has seen some discounts on its original price. This morning we learn it has a $205 build price, significantly lower than that of the $264.27 build price estimate iSuppli holds for iPad.

The big difference? The screen isn't as good. And let's face it, the screen is arguably the focus of the entire user experience.

Andrew Rassweiler, director, principal analyst and teardown services manager for iSuppli said:

"While the design approach makes the Galaxy less expensive to produce than the iPad 3G, it also makes for a product that lacks the same usability. The Galaxy Tab's screen resolution, size and technology are not at the same level as the iPad. This is a critical difference, given the fact that the display is a key differentiating factor for the iPad."

The Samsung offering does include some features iPad lacks: a gyroscopic sensor, front and rear cameras and support for Adobe Flash. (I'm not at all convinced Flash support is a feature. I see it as a liability.)

Apple's next iPad is likely to supplant the Samsung offering. It will boast higher-res cameras, a much faster processor, more memory, a Retina Display and, it seems likely, gyroscopic sensors. It is also possible Apple will introduce iPad 2.0 at a much, much lower price.

Other competitors meanwhile will be bidding for components against a company that's already holding 95 percent of the tablet market. While there will be changes in the market share figures, and Apple's hold of the market will dwindle, tablet sales are likely to increase rapidly, so in terms of pure profitability, at least, Apple won't be losing sleep.

Added to this, competitors will need to beat Apple's cloud-based implementations as they unfurl next year. For iPad users this could include access to entire iTunes music, TV and film collections, access anywhere to Home files and remote working using online hosted apps. iPad will prove tough to beat as Apple deploys its most advanced software and technologies to compete against an increasingly feral competition.

Android has a way to go. Strategy Analytics notes that the Android operating system achieved just 2 percent global tablet market share in Q3 2010. "We expect Android's share to rise in the fourth quarter as more models, such as the Samsung Galaxy Tab, enter the market," the analysts said.

The focus of demand is also changing. While the US is the largest tablet market, demand in Western Europe and Asia is beginning to climb.

About 80% of people planning to buy tablets intend to buy iPads, according to a ChangeWave survey of 3,108 people last month.

In tablets, we're heading for interesting times.

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