Apple's Tablet Share Slip Doesn't Matter

Apple  (NASDAQ: AAPL  )  once again saw its tablet share slip this past quarter, hitting a low of 29.6% of global shipments. But Apple still holds the top spot among tablet vendors and the new iPad Air and iPad Retina should easily boost its market share for the fourth quarter.

iPad Air. Source: Apple.

Market share evaporating out of thin Air
Apple's slip in market share in the third quarter was due in part to the company shifting from iPad refreshes in both the fall and spring to just one refresh later in the year. No new iPads shipped in the second or third quarter so it's not surprising Apple's share dropped from about 40% in Q3 2012 to about 26% year over year, according to IDC.

At the same time, Samsung  (NASDAQOTH: SSNLF  )  increased its tablet share from 12.4% to 20.4%, partially because the company bundles its tablets with other products. For example, AT&T is currently giving away Galaxy Tab 3 tablets this holiday season when customers purchase one of several Samsung devices. Samsung has also copied its smartphone approach with its tablets by releasing a myriad of tablets in a variety of price points. The diversification has helped push its tablet market share upwards.

The iPad Air starts shipping today and the Retina Mini will ship later this month. With the new additions to Apple's tablet lineup and the holiday season in full swing, Apple should experience solid fourth-quarter tablet numbers. IDC said in press release that it "expects Apple to enjoy robust shipment growth during the fourth quarter."

Absent from the IDC's top five vendor spots were Amazon.com and Microsoft  (NASDAQ: MSFT  ) . As with Apple, both companies just refreshed their devices, so third-quarter shipments were lower than normal. Both companies fall under the IDC's "other" tablet category, which makes up more than one-third of global tablet shipments.

Microsoft's new Surface 2 and Pro 2 tablets are still very unproven in the market, and the company's first iteration of the devices haven't had a significant impact against the top competitors. Though the Microsoft Surface refresh comes right before the important holiday shopping season, it's unlikely the tablets will take away any significant share from Apple, Samsung or the other tablet makers.

IHS' director of tablet research, Rhoda Alexander, said in a press release that though cheap Android devices surged in the third quarter, the low prices "left vendors searching for profit in an increasingly competitive market." Meanwhile, Apple still enjoys its high margins and actually increased its revenue by $3 per iPad unit in the third quarter. 

Investors should keep an eye on Apple's numbers for the next quarter, and should expect an uptick in market share as a result of the new iPad lineup -- though it's clear that Apple doesn't need to be as concerned with those numbers as its competition does.

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  • Report this Comment On November 01, 2013, at 2:06 PM, DanManners wrote:

    I was excited that the iPad Air launch would help Apple but it has not and it won't. Cook who is the worst CEO in the world, can't deliver on the iPad mini with retina display. He is always short supply and will make the December qtr a losing one. No 5s and no iPad mini.

    The stock has been down this week and we are heading to retest 480 level. I expect we break below it and retest 385 levels and move to 365 per Guy Adami.

  • Report this Comment On November 01, 2013, at 5:22 PM, JoeLemon wrote:

    Apple didn't allow preorders on the air hoping for long lines. No one showed up. The Apple stores by me has every model cellular and non cellular.

    The high profits on lower sales just shows how much they overcharge. Apple fanboys love to be overcharged. Apple is for people that think the more you pay the better it is. Apple really should charge 2K for the ipad. Apple people would love it.

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