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Samsung Sets its Sights on Apple's iPad

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For Korean-based Samsung, nothing, or no one, is off limits. After unseating Nokia as the world's No. 1 purveyor of mobile phones, Samsung put its tablet cards on the table at the Mobile World Congress (MWC) in Barcelona: The reign of Apple (NASDAQ: AAPL  ) and its iPad is ending.

You expect some blustering when a manufacturer rolls out a new product, like Samsung did in Barcelona with its new Galaxy Note 8. But when a company the size and strength of Samsung says it plans on doubling its already fast-growing tablet sales in 2013, to about 40 million units, tablet manufacturers better stand up and take notice.

Is it cocky if it's true?
To hear Samsung discuss its plans for tablet sales in 2013, the first reaction from iPad fans is likely, "Who do these guys think they are?" After all, Apple shipped nearly 22.9 million iPads around the world in calendar Q4 -- nearly three times that of Samsung's paltry 8 million, give or take a few units. And with that, Samsung lays down the gauntlet?

Apple's iPad retains the top spot in global tablet sales, but as of last calendar quarter, its share of the tablet pie dropped to 43.6%, off from 46.4% the prior quarter, and down significantly from Q4 2011's industry-leading 51.7%. During that same time frame, Samsung, with its myriad of tablet alternatives and price points, more than doubled its tablet market share to 15.1%. And the 8 million tablets it sold last quarter obliterated its sales from the same period a year ago, jumping more than 260%.

It's a lot easier to grow by two and three times when the numbers are (relatively) small; not so easy for industry leading Apple. But as Y.H. Lee, executive director of Samsung's mobile unit, said in an interview with CNET, "We expect to be very aggressive."

Is it quaking-in-your-boots time Apple fans? Not yet, but I sure wouldn't take what Samsung says lightly, either. These guys play to win. Just ask longtime mobile phone leader Nokia.

The best of the rest
Apple is the hands-down tablet leader, which is why it's Samsung's primary target. Along with a few smaller players, Apple and Samsung need to hold off Google (NASDAQ: GOOGL  ) and its Nexus devices, which are manufactured by Asus. Fueled by sales of Google's Nexus 7, Asus jumped to fourth on the tablet hit parade in Q4, pushing past Barnes & Noble's 1 million Nooks, and falling short of's Kindle Fire sales.

Though a chunk of Samsung's tablets run Microsoft's (NASDAQ: MSFT  ) Windows 8 OS, the others use Google's Android; coincidentally enough, the folks in Redmond, WA are having a difficult time getting any traction selling their own tablet, the Surface. Though it's not fair to suggest that Microsoft's Surface RT was an abject failure, there's more riding on its recently released Surface Pro tablet than its low-end RT. But can Microsoft overcome Surface Pro pricing issues? Until that question is answered, and Google's Nexus starts generating big-time sales numbers, the tablet wars will remain a two-horse race.

The future of tablets
Frankly, I'm less concerned with Apple's shrinking tablet market share than some may be, simply because Apple's numbers are so large. It takes a lot more to significantly move the needle when sales are nearly 23 million units in a quarter, as Apple did in Q4, compared to Samsung's 8 million. But the track record is there. Samsung was on a mission to unseat top-selling Nokia in mobile phone sales, a position that the Finnish manufacturer had held for years; and now, here it is, looking down from the top of the mobile phone mountain.

As for tablets, Samsung offers multiple price points and features; its reputation is growing as a world leader; and its management team is focused on one thing: knocking Apple from its top spot. Competition from Google and Microsoft is worth keeping an eye on, but being called out by Samsung is another thing altogether. Apple better start looking at multiple tablet alternatives and price points, or it'll be looking up at Samsung before you know it.

There's no doubt that Apple is at the center of technology's largest revolution ever. However, there is a debate as to whether Apple remains a buy. The Motley Fool's senior technology analyst and managing bureau chief, Eric Bleeker, is prepared to fill you in on both reasons to buy and reasons to sell Apple, and what opportunities are left for the company (and your portfolio) going forward. To get instant access to his latest thinking on Apple, simply click here now.

Read/Post Comments (6) | Recommend This Article (2)

Comments from our Foolish Readers

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 March 01, 2013, at 12:36 AM, JesusQuintanaJr wrote:

    Sounds like someone is a member of the Samsung Mob!lers program and is given free goodies to say nice things about Samsung.

  • Report this Comment On March 01, 2013, at 1:49 AM, rdb1536 wrote:

    Great for Samsung but after purchasing a Samsung tablet, just to find out they will no longer support it after one year, i will switch to Apple. If you put your name on your product you better support it for the lifetime of the user, not your next model introduction which happens every six months. Support my phone and tablet which are only 1 year old.

  • Report this Comment On March 01, 2013, at 4:48 AM, KaaJamm wrote:

    It's all about the Software, Apple Inc. rules there. iPad software is intuitive and functional, Samsung software, Android is ass-backwards.

  • Report this Comment On March 01, 2013, at 9:47 AM, chopchop0 wrote:


    Android stays innovative. iOS is still using the same old interface from years ago. Where are the widgets and improved notifications?

  • Report this Comment On March 01, 2013, at 5:24 PM, hank321 wrote:

    I cannot imagine buying an Android based device of any kind. I need genuine quality, and I will pay extra to have it.

  • Report this Comment On March 08, 2013, at 8:38 AM, chopchop0 wrote:

    Samsung makes quality Android devices. That's why they've shot to the top of the pack in the android manufacturing space.

    Their newest phones are more innovation and feature-rich than anything out of Cupertino CA

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