The Numbers
Mr. Um raised estimates for Apple’s iPad shipments to 37.9 million in 2011, up from 32.3 million. For 2012, he’s now modeling for 53 million iPads, up from 46.9 million. He believes the company will maintain ~63% market share for both years, meaning that he now sees 60 million tablets of all brands in 2011 and 84.1 million tablets in 2012, a staggering quantity for a category that didn’t exist before April of 2010.
Let’s look at what those numbers look like:
Chart by The Mac Observer from UBS data
The figure above nicely illustrates the thesis of John Martellaro’s Hidden Dimensions column from earlier on Wednesday in which he stated that Apple owns this market, leaving everyone else to fight over the crumbs. In this lineup, Apple is a giant, whose shade looms over each and every competitor, dwarfing their pathetic attempts to play in this market.
But if we look at the same data in a different fashion, we can see another tale, and that’s the ability of the many to work together to (try to) overcome the giant amongst them. In this case, they may not actually overcome Apple’s giant iPad, but they do combine to keep another giant — Google — relevant.
In the figure below, we pitted Apple against all would-be competitors (the chart works for both 2011 and 2012 estimates, as UBS is modeling the same share for Apple in both years).
Chart by The Mac Observer from UBS data
Either way you slice it, if the analyst’s estimates hold true, Apple will own and define the media tablet market even more strongly than it does the smartphone market (in that Apple is in control of the direction of the smartphone market and owns the vast majority of hardware profits from the sale of smartphones, even while Android is the larger platform following along in iPhone’s footsteps).
Those Competitors
We’ve seen the reports of Apple’s Android tablet competitors taking share away from iPad, but Maynard Um’s checks with retailers resulted in him believing that this is mainly sales into the channel, and not into end user hands. He stipulated that these were “anecdotal retail checks,” but said that, “Despite the increased visibility for tablets at retail channels, our anecdotal checks indicate that sell-through for many of the non-iPad tablets was limited.”
He added, “We did note the ubiquity of a few tablets at almost all the channels we visited, particularly RIMM’s Playbook, but channel sell-in and sell-through appear likely to be two different stories for the majority of vendors not named Apple.”
Part of the problem for those competitors, according to Mr. Um, is that Android tablet makers are finding it difficult to differentiate themselves from both the iPad and from other competing Android tablets. As this reporter has said, both frequently and often, price isn’t going to play the same role in the tablet market — experience and content are the driving factors in generating demand for tablets.
“Our view that those that have broader ecosystems (i.e., offering greater and more seamless utility, particularly to content) will be more likely to succeed,” Mr. Um wrote.
Hence his modeling for Apple to maintain ~63% share through 2012.
Shares in AAPL traded lower Wednesday, ending the day at US$392.59, down $10.82 (-2.68%), on strong volume of 23.4 million shares trading hands. the dip occurred during a broad sell-off as the markets reacted negatively to the ongoing debt debacle in Washington.
*In the interest of full disclosure, the author holds a tiny, almost insignificant share in AAPL stock that was not an influence in the creation of this article.