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For Apple and Microsoft, the Tablet War Is Heating Up

Good news, Apple (NASDAQ: AAPL  ) and Microsoft (NASDAQ: MSFT  ) investors: There's a new battleground in the tablet war.

At the end of the second quarter, 17.6% of workers were using an employer-provided tablet at work. That's according to a recent survey from U.K. researcher Ovum and up from 12.5% in last year's Q2.

And what of employees who don't have such generous bosses? Ovum says 66.7% of respondents who own a personal tablet also use the device at work. All told, 44.5% of workers surveyed said they owned a tablet, up from 28.4% last year at this time, Ovum reports.

"Even given the immaturity of the platform, tablet usage is fast becoming common practice in the enterprise, whether through BYOD or corporate provisioning," said Richard Absalom, analyst for Consumer Impact Technology at Ovum, in a statement.

Think of it as a new theater in the ongoing tablet war. Apple and Microsoft have the most to gain.

The Mac maker has a huge head start: Apple has sold more than 155 million iPads since introducing its first-generation tab in April of 2010. What's more, Strategy Analytics estimates there are now 40 million tablets hooked up 3G or 4G wireless networks in the U.S. The law of large numbers says most of these tablets are Apple iPads.

We'll see even more soon enough. Analysts put Apple's fiscal fourth quarter iPad unit sales at around 15 million, up from 14 million a year ago. Microsoft won't match that volume in sales of the new Surface RT 2 and Surface Pro 2, but the numbers also might come in better than expected. Ovum's data suggests that Microsoft is pitching tablet shoppers at an opportune time.

So what can investors expect? Not much initially. Microsoft had sold only $853 million worth of Surface tablets through June 30, and that's in spite of what appeared to be strong initial demand. That said, Microsoft also reported a $900 million writedown on Surface RTs last quarter. Apple, by contrast, sold $6.4 billion worth of iPads in the June quarter alone.

Surface 2 models might ramp sales some but there's no reason to expect corporate buyers to avoid iPads. Sure, there's no Office suite on the device yet. So what? We know one is coming. Meanwhile, Google has been offering a full range of Drive capabilities on iPads for while now, and Apple offers an iPad version of its iWork productivity apps. There are some 375,000 accompanying native iPad apps in all at the iTunes Store, according to data compiled by 

Therein lies the problem for Microsoft. Conditions may favor Surface RT 2 and Surface Pro 2 sales, but Apple's apps and installed base -- especially among the many consumers who use personal devices to work -- make it just as logical a choice for corporate buyers.

Do you agree? How do you see the tablet war between Apple and Microsoft shaking out? Let us know what you think in the comments box below.

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  • Report this Comment On October 16, 2013, at 12:02 PM, Starhawk1 wrote:

    Why is it you did not look at tablets other then those 2? The Google tablet is very nice for example and the Samsung line has been around almost as long as Apple and while I don't have the numbers I would be surprised if they have not sold a few more than Microsoft has.

    And what about the Samsung Note?

    I think your analysis is incomplete without looking at the other players in the market.

  • Report this Comment On October 16, 2013, at 4:09 PM, symbolset wrote:

    iPads are doing great and there is no reason to expect them to stop. Android tablets as a group just passed iPads in volume, but there is room for both. Now Intel is suggesting $100 Intel Android tablets in the near future.

    Both of these offer the owner remarkable, delightful experiences with few limitations. Each is a wonderful, powerful device enabling and empowering people to do what they need to do, entertaining them, connecting them to their friends and family in incredible new ways. Neither needs to "defeat" the other to accomplish its goals as they are not conflicting.

    Windows tablets, that's a different thing. A Windows tablet is the answer to the problem: "Microsoft is getting crushed in mobile." While that is a problem for a certain set of people, it is not a problem for the vast majority of people buying the tablets. Helping Microsoft resume its place as the dominant regulator of all personal technology is not a factor at the decision point.

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