Apple’s Tablet Lead Widened Q1, But Kindle Fire Slipped to Third—IDC

Media tablets missed sales targets for the first time in Q1 led by a steep drop in shipments of Android-based tablets, according to International Data Corp.’s quarterly tablet and e-reader tracker. Worldwide tablet shipments for the quarter totaled 17.4 million units in Q1, coming in 1.2 million units below IDC’s projection for Q1, it said. IDC had predicted a seasonal drop of 34 percent from Q4’s 28.2 million shipments, but the actual decline was 38 percent below projections, it said. Year-over-year growth for the developing category was 120 percent, up from 7.9 million units in Q1 2011, IDC said.

Apple’s lead in the category continued to widen, despite a 3.6 million unit drop in iPad shipments following the holiday quarter to 11.8 million, as the company grew its worldwide share from 55 percent in Q4 2011 to 68 percent in Q1 2012, IDC said. Apple strengthened its position by marketing the iPad as an “all-purpose tablet” rather than as a content consumption device only, according to Tom Mainelli, IDC’s research director for mobile connected devices. Apple’s decision to lower the price of the iPad 2 to offer a less expensive alternative “is resonating with consumers as well as educational and commercial buyers,” he said.

After selling 4.8 million Kindle Fires in Q4, Amazon tablet sales have cooled considerably, IDC noted, with its market share plummeting from a second-place 16.8 percent in Q4 to a third-place 4 percent in Q1 behind Samsung. Lenovo and Barnes & Noble came in fourth and fifth in market share terms for the quarter, it said.

To compete with Apple, tablet makers have to offer products at “notably lower price points,” Mainelli said, something that Amazon, Barnes & Noble, and Pandigital “figured out early on.” He expects a new, larger-screen device from Amazon soon “at a typically aggressive price point,” and he noted that Google will co-launch an inexpensive, dual-branded tablet with Asus that’s on a price par with Kindle Fire. Google’s new tablet will run a “pure version of Android,” he said, compared with Kindle Fire’s “forked version” of Android that “cuts Google out of the picture."

Although total Android shipments were down sharply in last quarter, IDC expects next-gen tablets from Samsung and Lenovo to gain traction and predicts the category will rebound this quarter based on new product introductions. The worldwide tablet market will enter “a new phase” in the second half of the year that will “reshape the competitive landscape,” said Bob O'Donnell, IDC program vice president for clients and displays. Apple will continue to “sit comfortably” in the lead, but the battle for the runner-up spots will be “fierce,” he said.

The impact that Microsoft Windows 8- and Windows RT-based tablets, expected to ship in Q4, will have on the tablet market is unknown, as pricing for Windows tablets hasn’t been announced, O'Donnell said. Both pricing and consumer reception to the new OS will be critical to the success of Windows 8 tablets, he said. Ultrabooks “and a few surprise product launches” will also have an impact on tablet numbers in the second half, he said.