iPad share of tablet market jumps as Kindle Fire slumps

Apple's iPad reclaimed a larger share of the global tablet market last month, in part because of a more-serious-than-expected slump in sales of the hot Kindle Fire in the first quarter, IDC analysts said today.

The iPad's share of the tablet business shot up to 68% in the first quarter of 2012, climbing more than 13 percentage points from 2011's fourth-quarter share of 54.7%, said IDC's Bob O'Donnell, program vice president for clients and displays.

At the same time, Amazon's share plummeted from about 17% in the fourth quarter of last year to just 4% in this year's opening quarter.

O'Donnell attributed the spike in Apple's share and the drop in Amazon's to several factors, including the U.S.-only sales of the Fire -- which tightly tied it to the U.S. holidays -- and the iPad's international reach, including in China, where the tablet was a hot ticket in that country's January holiday gift-giving spree.

"We expected to see a significant drop in Amazon Fire [in the first quarter]," O'Donnell said in an interview Thursday. "But honestly, the drop was a little bit more than we expected."

The dramatic shifts in share show that tablets remain a seasonal product, said O'Donnell. That includes the iPad, which saw its sales fall off -- even with the Chinese New Year at its disposal -- some 3.6 million units in the first quarter compared to the previous three-month period.

But IDC also argued that the iPad has legs the rival tablets do not. "Apple's move to position the iPad as an all-purpose tablet, instead of just a content consumption device, is resonating with consumers as well as educational and commercial buyers," Tom Mainelli, IDC's research director for mobile connected devices, said in a statement earlier today.

According to Mainelli -- and O'Donnell echoed his colleague -- Apple's positioning of the iPad as more than a consumer product, one appropriate and salable to major markets like education and enterprise, sets it apart from the competition.

Apple has regularly beaten that drum. Last month, Apple's chief financial officer touted a 10,000-iPad deal with the San Diego School District, and said the district planned to buy another 15,000 iPads in the second quarter.

In the same April earnings call with Wall Street analysts, Apple CEO Tim Cook called iPad sales to businesses "off the charts."

"But it's too early to say that the battle is over and done with," cautioned O'Donnell, referring to Apple's current dominance of the tablet market. "That would be an incorrect assumption."

IDC expects that Amazon will introduce a larger-screen device "at a typically aggressive price point," and that Google will move into the market with an Android tablet co-branded with Asian computer maker Asus that will "compete directly on price with Amazon's Kindle Fire."

Lurking in the wings are devices powered by Microsoft's Windows 8 and Windows RT -- the latter formerly called WOA, for Windows on ARM, by the Redmond, Wash. developer.

IDC hasn't taken a firm stance on Windows 8/Windows RT, because devices, and more importantly, their prices, have yet to be disclosed. And pricing seemed to be foremost on O'Donnell's mind.

"Imagine this scenario," he said. "The Kindle Fire and Nook are at $199 with 7-in. tablets. Each will probably do a larger-screened device -- 9- or 10-in. -- at $299. Apple may do a 7-in. iPad at $299. It already has the iPad 2 at $399 and the new iPad at $499. That leaves very little room for the other guys."

Those "other guys" include Google and hardware partners creating what the IDC analysts called "pure-play Android tablets," in other words those that use a standard edition of Google's operating system rather than one that's heavily customized, as in the case of the Fire or Barnes & Noble's Nook Tablet.

"They're going to face some pretty serious competition on price," said O'Donnell.

Mainelli echoed that. "To compete in the media tablet market with Apple, they must offer their products at notably lower price points," Mainelli said.

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Gregg Keizer

Computerworld (US)

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