Tablet Sales to See Hangover in Q1, But iPad 3 Could Bring Party Back to Life

February 22nd, 2012 by Trefis Team
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Tablet sales this quarter could be suffering from a hangover from the holiday season. According to a DigiTimes report, the global tablet shipments will decline by 30% in Q1 2012 compared to Q4 2011. [1] The report also mentioned that out of a total of expected 15 million tablet shipments in Q1, Apple’s (NYSE:AAPL) iPad 2 and iPad 3 share will be 11 million, and Amazon’s (NASDAQ:AMZN) Kindle Fire share will be 1.5 million.

Such a large decline is not good news for the tablet industry, especially Apple, because the iPad accounts for about 13% of our $550 price estimate for Apple stock. However, the launch of the iPad 3, expected to be introduced later this quarter, could help boost the tablet industry and be part of the reason why buyers might hold off from making purchases in the beginning months. Our price estimate for Apple stock is about 10% above the current market price.

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iPad 3 could propel tablet industry’s growth

Although Apple has officially not disclosed any details around iPad 3, industry sources indicate that Apple is all set to announce the launch of iPad 3 in March this year. AllThingsD reported that Apple could introduce the iPad 3 as early as the first week of March in an event in San Francisco. [2]

The report suggested that iPad 3 will be a much advanced tablet:

A device similar in form factor to the iPad 2, but running a much faster chip, sporting an improved graphics processing unit, and featuring a 2048×1536 Retina Display — or something close to it [2]


According to another report, the iPad 3 could support 4G technology so that Verizon (NYSE:VZ) and AT&T (NYSE:T) could start selling it on their 4G networks. (Read Apple’s Ready to Roll Out 4G Enabled iPad 3 for Verizon and AT&T) These are promising signs for Apple and tablet industry as a whole. However, the real impact of iPad 3 will only be seen in Q2 2012, and hence Q1 could well be a dampener for the tablet industry.

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Notes:
  1. Global tablet PC shipments down 30%, says Digitimes Research, February 20th, 2012 [↩]
  2. Apple to Announce iPad 3 First Week in March, AllThings D, February 9th, 2012 [↩] [↩]