Apple Inc. Has Lost Its Lead, but It Still Sets the Scene in the Tablet Market

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It took just one year for the former leader and runner-up to swap places in the tablet market.

Google's ( GOOG ) Android-based devices now dominate the segment, with 62.6% share of the market in the second quarter of 2013, compared to just 38% of the market in the same period last year, new data from International Data Corporation (IDC) shows . However, Apple ( AAPL ) still calls the shots, even though its market share declined rapidly to 32.5% from 60.3%, according to IDC (or to 42.7% from 71.2%, according to Canalys ).

Growth in the worldwide tablet market slowed in the second quarter of 2013, with volume down 9.7% from the first quarter but still up 59.6% year-to-year. Consumers are waiting for the new iPad to arrive, IDC says.

"A new iPad launch always piques consumer interest in the tablet category and traditionally that has helped both Apple and its competitors," said Tom Mainelli, Research Director, Tablets at IDC.

He added that the market slowdown is likely to continue into the third quarter, but in the fourth quarter, new products from Apple and Amazon ( AMZN ) might "drive impressive growth."

On the vendor side, Apple continues to dominate with a solid 32.4% of the market share, which represents a 14.4 percentage point lead over Samsung (OTCMKTS:SSNLF), its closest competitor, whose share of the market is 18%.

But it's neither iOS nor Android that is showing a record growth rate - it's Microsoft ( MSFT ) Windows.

Despite a skyrocketing increase in market share (527% year-to-year, according to IDC), Windows tablets are still nowhere near the category's leaders in terms of volume. Microsoft and partners shipped just 2 million tablets in the second quarter, compared to 14.6 million iPads and 28.2 million Android-based devices.

Microsoft's own tablet business enterprise has been a disaster; the company recently announced a $900 million hit related to Surface RT "inventory adjustments." That news was followed by price cuts on Surface and Surface Pro tablets. However, new products from Samsung and other large Windows vendors might further drive sales of Windows-based tablets.



The market leader, Android, remains a hugely fragmented platform in terms of vendors, with the "others" category controlling nearly 39% of the market - more than any other single maker, including Apple (32.4%). However, Samsung keeps rapidly growing its market share. It has more than doubled year-to-year, from 7.6% in the second quarter of 2012 to 18.0% in the same period of 2013.

With the recent arrival of an updated Google Nexus 7 and forthcoming product line updates from Apple and Amazon, this year's holiday season might lead to new growth records for the thriving tablet market.



The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Technology

Referenced Stocks: AAPL , AMZN , GOOG , MSFT , SSNLF

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