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.

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

If we convert these figures into market shares:

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.

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.