By Quentin Fottrell
The iPad hasn’t gotten any smaller since it was launched two years ago, but new research suggests its market share may be shrinking.
Half of all tablet owners in the United States own Apple’s tablet, a drop from 72% this time last year, according to a new report by Frank N. Magid Associates, a marketing research firm in New York. What’s behind the dramatic drop? The proliferation of cheaper tablets, including the $199 Kindle Fire, says Tom Godfrey, the firm’s director of mobile strategy who interviewed 4,700 people for the survey. He estimates that the Fire, launched last year, already accounts for 22% of the tablet market. (Apple declined to comment, and Amazon did not respond to requests for comment).
Other tablets are also taking a bite out of Apple’s market share. Android tablets might not have the cool factor of the iPad, Godfrey says, but he says their market share has jumped from 25% to 45%; the rest is made up of Windows and Blackberry owners. And more models are hitting the market. Released last month, the Google Nexus 7 has a starting price of $199 and, unlike the iPad, has Flash video. “Even as a jaded industry analyst, I was impressed,” he says. PC Magazine called it a “game-changer.” Microsoft’s Surface tablet – which will come with its own pre-loaded suite of Microsoft Office applications and a detachable keyboard – is expected later this year.
Globally, Apple appears to be holding its own, according to separate research released today. iPad shipments from manufacturers to retailers made up 68% of the international market in the second quarter versus 61% a year ago, according to market research firm IDC. The report doesn’t count tablets actually purchased by consumers. Also, researchers note that the Kindle Fire isn’t sold outside the U.S.
Apple is reportedly fighting back. According to several recent media reports, the company’s Asian suppliers are preparing to produce a mini-iPad, aimed squarely at the lower-end of the market. This, despite late CEO Steve Jobs’ objection to a smaller iPad because it could tarnish the appeal of the $499 version, says Walt Piecyk, technology analyst with BTIG brokerage. Indeed, producing both models “without changing how Apple is viewed by the consumer” will be a tough balancing act, he says.