On the surface at least, it would seem that the iPad is losing market share real fast. Just this week came a published report, citing IDC — which is sometimes wrong I might add — that the iPad’s share of the Chinese market has slumped below 30%. Overall, Apple had a 32.4% share across the planet in the last quarter, way down from over two thirds at one time.
Even worse, iPad sales slumped compared to last year, according to Apple’s last earnings report. To be fair, last year’s June quarter came on the heels of the launch of a new iPad, whereas the current lineup dates to last fall. That’s practically vintage for mobile gear.
But don’t get me wrong. I’m not making excuses for Apple. It may well be that the iPad is being pummeled into submission by lower-priced competitors, but is that a problem Apple needs to solve to keep sales at a reasonable level for the iPad? Is the $329 entry-level price for an iPad mini just too much, particularly for a tablet that doesn’t have a high definition or Retina display?
Well, the answers appear to be more complicated than that, and it raises the question about the value of all those tablets that are being counted in various sales reports and surveys. First and foremost, IDC is estimating shipments and not sales. It’s not uncommon for manufacturers to flood the channel with stuff just to make their numbers look favorable. But they have to pay the piper somewhere along the line if a lot of that inventory remains unsold. Think about Microsoft having to take a $900 million write-down for the Surface tablet.
But even if the shipments and sales eventually align, at least for the most part, there is a huge issue to consider: What are the tens of millions of people who are buying tablets without an Apple logo doing with them?
A basic function of a tablet is going online. Even if users aren’t growing their app libraries, they will use email and a browser of some sort. Yet we have this ticklish number from Apple that nobody is disputing, which is that 84% of the tablet users going online have iPads. How do they know? Well, when a browser calls up a site, it sends a user agent code indicating the app and the OS. If you have your own Web site, you can consult such statistics in a logging app.
So out of all those other tablets, growing far faster than the iPad, only 16% are getting online, or at least getting online in a way that the traffic can be measured with standard Web analytics. Now the Amazon Kindle may not account for much, since many of its owners are using Amazon’s own storefront to buy things rather than to visit their favorite sites — other than Amazon. But I’m just guessing here.
No when it comes to apps, the App Store does better than Google Play. Although the number of tablet-optimized apps for Android is growing fast, most developers take the cheap way out, which is to just scale up the existing design, rather than optimize the presentation to look better on larger displays. That sort of trick would probably get the app rejected from the App Store. But it also means that an Android tablet isn’t necessarily providing a superior user interface compared to a smartphone, other than taking up more space.
Now the cheap out approach may mean that owners of Android tablets will buy fewer apps. Understandable, but how would that keep them from using Google’s perfectly serviceable browser to do a little online surfing? Does that make sense to you?
Now it may be that those cheap no-name tablets are barely usable. People buy them because they happen to resemble the more expensive brands at a lower price. Being dirt cheap, they are junk that will deliver a poor user experience or just stop working after a while. In that respect, these tablets are barely above toys.
This would be something for an NPD Group or IDC or some other surveying organization to consider. But it’s also true that even the branded tablets aren’t always so reliable. I’ve read all those reports about early failures or inconsistent performance on the original Google Nexus 7. It got great reviews last year, but doesn’t seem to be quite as capable of a long-lasting experience. It’s too early to determine how well the 2013 version, with an HD display, is holding up.
Now for those who look at sales or shipping numbers and little else, it would seem that the demand for the iPad is falling. But if customers care about what they buy, maybe sales for those cheap tablets will soon collapse, just as sales collapsed for netbooks after the iPad arrived.
I would hope customers would prefer to buy gadgets that actually work — and work consistently.
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