By Lisa Johnston
New products on display at the American International Toy Fair, held in N
El Segundo, Calif. — Two years after creating the market, Apple is still far and away the leader, 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.
According to IHS iSuppli Display Materials & Systems Service, during the second quarter Apple shipped 17 million iPad 2s and the most recent iPads, up 44.1 percent from 11.8 million the first quarter.
This industry 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 percent share.
“Apple is making all the right moves to rebuild its dominant position in the tablet space,” said Rhoda Alexander, tablet and monitor research director 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.”
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 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, the report stated.
In July of this year, Apple exceeded the 85 million mark for iPad media tablets sold since the product’s launch in April of 2010.
IHS iSuppli media tablet consumer research shows that satisfied users are likely to go back to the same brand for their next purchase. In all likelihood, Apple already has developed a solid future customer base, which will continue to strengthen, barring a major stumble on an upcoming product release.
In contrast, Samsung, Apple’s closest competitor, has shipped almost 13 million total media tablets. Samsung was one of the first to enter the market after Apple, introducing its first Galaxy Tab in the fourth quarter of 2010. However, Samsung hasn’t yet achieved the cumulative unit sales that Apple reached by Christmas of 2010.
One difficulty for players other than Apple has been in establishing a clear brand identity in the media tablet market. Without a distinctive brand identity, competitors are forced to battle on price, robbing them of the profit margin that fuels future product and ecosystem development, IHS noted.
Google’s entry-level $199 price point exacerbates the price pressure across the Android tablet universe, just as Amazon’s entry did in the fourth quarter of 2012. It remains to be seen at what price point Microsoft will enter.
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