Apple Takes a Bigger Bite of Tablet Market Share as Android Slips
According to a recent report from IDC, Apple‘s (NASDAQ:AAPL) iPad increased its share in the global tablet market from 66% in calendar Q1 2011 to more than 68% in Q2 2011. [1] Google’s (NASDAQ:GOOG) Android platform lost some traction in the market declining from 34% to 27% during the same period while Research in Motion (NASDAQ:RIMM) grabbed 5% market share in Q2 its first quarter since the release of the PlayBook tablet. The report also forecast that Android’s market share will decline to 23% in Q3 before rebounding to 26% in Q4 while HP’s (NYSE:HPQ) $99 TouchPad fire sale will help it attain a market share of around 5% in the third quarter.
The iPad accounts for around 12% of our $510 price estimate for Apple stock, which is about 30% above market price.
Android is well-positioned in the smartphone market…
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Google’s Android platform has had far more success in the smartphone segment where it has managed to consistently gain market share. Its U.S. smartphone subscriber share increased from around 35% in Q1 to 40% in Q2 while Apple experienced only a small gain from around 26% to 27%. [2]
…so why is it struggling to gain traction in tablets?
Android’s struggles in the tablet market primarily stem from competition (particularly the TouchPad sale) as well as the fact that Android tablets and smartphones still use disparate operating systems. In our earlier note titled Why Apple Still Dominates Tablets, we discussed that Apple’s advantage in the tablet world is that its operating system, iOS, works for both the iPhone and iPad. This helps developers in synchronizing development tasks, whereas Google has to deal with two different systems.
Google came out with an advanced version of Android for smartphones known as GingerBread and a separate version for tablets named Honeycomb. The next OS dubbed Ice Cream Sandwich will work on both smartphones and tablets, but we don’t expect it to be released until late 2011 at the earliest. Until then we do not expect Android tablets to gain any meaningful ground on Apple.
See our complete analysis for Apple stock here
Notes:- Media Tablet and eReader Markets Beat Second Quarter Targets, Forecast Increased for 2011, IDC, September 14th, 2011 [↩]
- comScore Reports June 2011 U.S. Mobile Subscriber Market Share, August 4th, 2011 [↩]