Apple has shipped some 20 million iPads in the first twelve months since launch to capture the first mover advantage in the tablet market. Already into the second generation iPad 2.0 the Apple mantra of constant improvement along the Key success factor (KSF) lines is evident. Smaller, faster, better battery life more facilities, more apps, the infinite loop of product development persists. Available in six models 16GB, 32Gb 64Gb wifi and wifi 3G, the price range is from $499 - $829. First mover advantage with Kaizen is a strong combination.
In 2010, Apple shipped 15 million iPads to register a market share close to ninety per cent of the tablet market. But the Androids are coming. Samsung Galaxy emerged as the first to make significant sales as total Android sales jumped to 2.0 million units in the final quarter of 2010. New products from ACER, Advent, and HTC will join forces with the Motorola Xoom and the Blackberry Playbook in 2011 to challenge the Apple hegemony.
Android devices captured 22 percent of global tablet shipments in the three months to Dec. 31, up from 2.3 percent in the preceding quarter according to Strategy Analytics, the Boston-based researcher. The iPad accounted for 75 percent of shipments in the period, down from about 95 percent, it claimed.
The despatch statistics include pipeline sales rather than consumer purchases, so the estimates of market share flatter the Androids in the final quarter. Let’s not forget the early claims of 8% market share for the MS Zune in the iPod market on launch, quickly falling to 4% then 1%, three years post launch.
Google gives away Android for free to boost revenue from services such as mobile advertising and expand the market for its search engine. A wider range of cheaper devices will probably erode the iPad’s market dominance, said Neil Mawston, director at Strategy Analytics.
However, we believe that Apple will sustain a 75% share of market over the medium term despite the Android challenge, following the iPod MP3 market share model. First mover with constant improvement is a powerful combination and Apple is never afraid of cannibalistion of own product sales in the process.
How big will the market be? iPad sales in the first quarter of the year fell to 4.7 million units in the first quarter of 2011 down from 7.3 million units in the Christmas quarter. Apple claims to have sold all they could get as supply restrictions failed to meet strong demand.
Still Apple iPad sales in 2011 are likely to be between thirty to forty million units, with Android sales restricted to around ten million units. This would give total segment sales of forty to fifty million units and feed an Apple market share of 75% to 80%.
In 2012, the market will increase to one hundred million units with the potential to double in the following year 2013 and double again by 2015. This would create a market worth well over $150 billion dollars retail by the close of the five year outlook.
In 2011 Apple sales will soar to over $100 billion compared to $5 billion in 2001 the launch of the iPod. The potential prize with the emergence of the Tablet sector is huge and Apple is well placed to meet the challenge of the Androids. First Mover advantage, Kaizen and Key Success Factors the key.
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Author of the Apple Case Study from the iPod to the iPad. Available as a FREE download here.
The views expressed are my own and in no way reflect pro.manchester policy. In no way should the comments be considered as investment advice or guidelines or reflect political bias. UK Economics news and analysis : no politics, no dogma, no polemics, just facts. JKA is a visiting professor at MMU Business School, an economist and specialist in Corporate Strategy, educated at LSE, London Business School with a PhD from Manchester Metropolitan University. Author of the Apple Case Study from the iPod to the iPad part of which is published in Johnson Scholes Whittington Exploring Strategy 9th edition 2010.
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