Exaggerating the IPad's 'Decline'

Analyst Jack Gold has announced that Apple will see its majority market share for tablet devices slide to less than half by 2014-2015. It’s understandable that analysts would predict a similar sort of trajectory for the iPad that the iPhone has experienced. After all, a tablet is just a big smartphone. Both categories of devices run basically the same mobile operating systems, at least as far as iOS and Android are concerned.

In fact, the experience on Android and iOS tablets for end users isn’t nearly the same as that on phones that use these platforms. If Android feels a bit immature on smartphone hardware, it’s exceedingly awkward on tablet devices. IOS, on the other hand, feels tailor-made for each. Nothing about it seems hasty. It’s no attempt to quickly gain a foothold in a market the OS was shoehorned into in the first place, as Honeycomb was. Ice Cream Sandwich might improve things—probably as an evolutionary update, at best, if the history of Android OS iterations is any example.

In other words, Android has yet to prove that it can even deliver a mature, feature-complete tablet OS designed to take advantage of larger-screened devices. Gold suggests in his note that Microsoft and QNX from Research in Motion will each be able to each acquire 10 percent of the tablet market by 2015—an even greater predictive reach because those platforms have far more to prove in terms of market relevance. RIM won’t even have e-mail working on its platform until 2012. Microsoft’s software is a risky desktop/mobile hybrid that hasn’t experienced a public release. Saying that either will become a solid but distant third is like having encountered Zune and then forecast it would challenge the iPod.

Predicting that the iPad vs. Android competition in the tablet market will proceed along the same lines as the iPhone vs. Android rivalry in the smartphone market also discounts key differences in the distribution model of both devices. Despite some support from carriers for 3G data plans, most consumers substitute tablets for computers, not phones. That’s how many people shop for them, too.

Carriers Favor Android

Carriers don’t have nearly as much say over which devices get pushed as they do with smartphones. Even today, those who want an iPhone in many markets remain stuck with one or two carriers; if they want greater network choice, they have to buy a different device. And carriers have tended to favor Android because it offers them greater customization options, allowing more control over the customer relationship.

So long as the tablet isn’t inextricably tied to distribution through network operators, Apple holds the advantage because it has the strongest marketing, sales, and retail network of any device OEM.

As we reported yesterday, Apple’s iOS market share by usage is still well ahead of Android’s or that of any other competitor, as measured according to website access by platform and by browser. Those numbers combine tablet and smartphone figures, but since Android is acknowledged to be faring much better vs. iOS in smartphones, it stands to reason that the iPad skews things heavily in Apple’s favor.

When we see reports that claim Apple is losing ground, those numbers more often than not reflect shipments, not actual sales to consumers, as Kevin Tofel pointed out. Many Android devices reported to have shipped are likely sitting on store shelves, whereas Apple’s numbers represent devices actively in use by consumers.

A Surfeit of Shipped Androids

Determining the actual gap is made even more difficult when you consider that new Android tablets are constantly coming to market. Combine old stock with new, throw in a glut of essentially obsolete devices in the form of the discontinued HP TouchPad (which could be had for just $99 during the last couple of months), and you’ll find yourself in a statistical minefield that probably doesn’t represent long-term trends.

The iPad has a huge lead in its current form and Apple has lots of money to spend on research and development, which makes it the best-positioned tablet-maker to introduce category-innovating new form factors, features, and technologies. Competitors can try to shake things up, too. They have done so with different sizes, detachable laptop docks, and so forth. Still, if the groundwork is lacking, variations on Apple’s successful model have little chance of success.

Predictions that draw parallels between the smartphone  and tablet markets are missing the point: The future tablet landscape will be shaped by such unconventional attacks as Amazon’s $199 Kindle Fire, which counts not on mimicking Apple’s success, but on consumer willingness to sacrifice on features to get a low-cost content-consumption device.

Even so, I think the iPad will weather these and other assaults and continue its reign beyond 2015. Indeed, I’ve already pointed out how and why Apple’s tablet is still more appealing than Amazon’s.

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