IHS SAYS APPLE’S 2Q SHARE OF MEDIA TABLET MARKET HITS ALMOST 70%

(The following is a reformatted version of a press release
issued by IHS and received via e-mail. The release was confirmed
by the sender.) 
Apple’s Share of Media Tablet Market Hits More than One-Year
High in Q2 
El Segundo, Calif., (Aug. 14, 2012)--Two years after creating
the market, Apple Inc. remains the king of all media tablets,
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. 
Apple during the second quarter shipped 17 million iPad 2 and
new iPad media tablets, up a stunning 44.1 percent from 11.8
million the first quarter, according to the IHS iSuppli Display
Materials & Systems Service at information and analytics
provider IHS (NYSE: IHS). This industry-leading 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
70.0 percent share. 
“Apple is making all the right moves to rebuild its dominant
position in the tablet space,” said Rhoda Alexander, director,
tablet and monitor research 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 Inc. and Microsoft Corp., 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.” 
New entrants add spice
“A major component of Apple’s success to date is the company’s
well-developed ecosystem of content and applications it had in
place before entering the tablet market, and its absolute
control of the hardware, software and operating system,”
Alexander noted. “When a customer buys a media tablet, what he
or she is really doing is purchasing a key to that ecosystem,
not just a piece of hardware.” 
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 original equipment manufacturer
(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. 
“It’s possible that each of these vendors is entering the market
intending to lead by example, rather than trying to be serious
branded tablet competitors,” Alexander said. “However, they both
have the potential to end up as major players even if their
original intent was only to demonstrate how it could be done.
Microsoft in particular will be one to watch, with its existing
Xbox gaming community on the consumer side and its operating-system dominance in business markets.” 
Looking beyond the hardware
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. 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. 
“Tablets are becoming an increasingly important piece of the
consumer electronics space,” Alexander noted. “Vendors must
understand that customers are not buying hardware, but that they
are buying an experience. Users then want to carry that
experience across multiple devices, creating an opening for the
savvy vendor into a much larger sales opportunity than a single
tablet.” 
Apple, Microsoft and Google are all keyed in to this much larger
user experience. To date, the media tablet for the most part has
been a consumer phenomenon, but the next big battle will be
fought in the business space. Indeed, the ongoing rivalry is
shaping up to be a battle of the Titans. 
For more information, please contact: 
Debra Jaramilla
Manager, Global Product Marketing
debra.jaramilla@ihs.com
Direct: +1 310 524 4047 
Or 
IHS Media Relations
press@ihs.com
+1 303 305 8021
________________________________________________________________ 
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Copyright © 2012 IHS Inc. All rights reserved. 
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