Just How Big Will the Tablet Market Get?

Market researcher Gartner is out with its latest figures on the state of the tablet market. Let's not only dig in to its digits but also compare them with fellow researcher IDC's own estimates that were released last month.

A numbers game
Unsurprisingly, Gartner shows that Apple (Nasdaq: AAPL  ) continued to reign supreme in the tablet market with the iPad, representing two out of every three tablets sold in the world. There were just over 60 million tablets sold last year, and Gartner estimates just shy of 40 million of these were iPads.

This almost lines up with Apple's official figures, as the iPad maker disclosed 40.5 million iPads sold in calendar 2011. What's a measly half-million iPads among friends?

The researcher believes that total tablet shipments will nearly double this year to 118.9 million units, with Apple claiming a 61.4% market share for the year. Google (Nasdaq: GOOG  ) Android and Microsoft (Nasdaq: MSFT  ) Windows 8 are expected to pick up and chip away at the iPad's market share, but this tablet pie will grow so quickly that Apple will still have its hands full pumping out iPads.

Here's how Gartner thinks it will play out in the coming years.

Operating System

2011

2012

2013

2016

iOS 40 million 73 million 99.6 million 169.7 million
Android 17.3 million 37.9 million 61.7 million 137.7 million
Microsoft 0 4.9 million 14.5 million 43.6 million
QNX 807,000 2.6 million 6 million 17.8 million
Other 1.9 million 510,000 637,000 464,000
Total 60 million 118.9 million 182.5 million 369.3 million

Source: Gartner. Figures may not add up precisely because of rounding.

If we convert these figures into market shares:

Operating System

2011

2012

2013

2016

iOS 67% 61% 55% 46%
Android 29% 32% 34% 37%
Microsoft 0% 4% 8% 12%
QNX 1% 2% 3% 5%
Other 3% 0% 0% 0%
Total 100% 100% 100% 100%

Source: Author's calculations.

Before you start shedding any tears for Cupertino over the prospect that its market share will shrink from 67% last year to an estimated 46% four years from now, keep in mind the volume figures above and remember that's all going to one company, while the Android and Microsoft slices will inevitably be subdivided among the armies of hardware OEMs.

A tale of two researchers
Do Gartner's digits play nicely with IDC's?

Just last month, IDC predicted that Android would dethrone the iPad as the tablet king as soon as 2015. In contrast, Gartner sees iPad hegemony remaining the status quo throughout its forecast. They each have different views of the overall tablet market in general, but also slightly differ on historical figures.

Researcher

2011 (Actual)

2012 (Forecast)

2016 (Forecast)

Gartner 60 million 118.9 million 369.3 million
IDC 68.7 million 106.1 million 198.2 million

Source: Gartner, IDC. Worldwide tablet shipments.

It's obviously pretty difficult to forecast uncharted territory four years in the future, especially when it comes to a sector of high-flying tech with unprecedented growth, but we're talking about an 86% difference in those 2016 estimates.

Gartner and IDC agree on some fronts, like Amazon.com's (Nasdaq: AMZN  ) Kindle Fire boosting Android's market share as the best-selling tablet in that camp. Both also expect Apple to remain the top individual vendor as the only provider of iOS.

IDC thinks Apple will sell 94.7 million iPads in 2016, lower than Gartner's 169.7 million prediction. iPad average selling prices, or ASPs, have been trending down over time ($593 last quarter); if we conservatively use a $500 ASP, that implies that Apple's iPad business could grow to be a $47.3 billion to $84.9 billion segment alone in 2016, depending on whom you ask.

That would be enough to earn the iPad business alone a No. 51 or No. 25 spot, respectively, on the 2011 list of Fortune 500 companies.

You and me both
Gartner and I happen to agree on something, too: The weakness or lack of optimized tablet apps for Android is what's holding back the platform. The researcher stated, "The main issue with Android tablets has been the lack of applications that are dedicated to tablets and therefore take advantage of their capabilities." I told you it wasn't Google's fault.

Any way you slice it, the tablet market is going to explode. We'll have to wait to see by how much, but explode it will, and that includes the semiconductors inside. Here's a promising pick on how to play The Next Trillion-Dollar Revolution. This company has its sights set on the next generation of tablets. Get the free report now.

Fool contributor Evan Niu owns shares of Apple and Amazon.com, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Google, Apple, Microsoft, and Amazon.com. Motley Fool newsletter services have recommended buying shares of Google, Microsoft, Apple, and Amazon.com and creating bull call spread positions in Apple ands Microsoft. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 13, 2012, at 12:19 AM, melegross wrote:

    I really do laugh at these numbers. First of all, even though Apple released all of its sales numbers for the year, these companies still give estimates that don't agree with the real numbers. That certainly makes the rest of the numbers suspect, particularly as other manufacturers have either just given shipping numbers, or refused to give any numbers at all.

    In addition, the original estimates for 2011 from 2010 have Apple's share in 2011 at below 60%, closer to 50%, and their marketshare for 2012 at 40%. The first was way off, and now the estimate for 2012 is way up from just last years prediction.

    Given all this, why should we pay any attention to anything they say?

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