PC Makers Should Fear Amazon's Android Gains
Apple’s iPad sold 15.4 million units during the final calendar quarter of 2011, representing a 111 percent increase over its tablet sales from the same period in 2010. Android tablets managed to increase their share of the tablet market by 10 percentage points during the same year, according to new numbers from Strategy Analytics (via Bloomberg). That’s more a concern for PC makers having trouble transitioning to the post-PC era than it is for Apple (AAPL).
Apple Chief Executive Officer Tim Cook said during his company’s recent earnings call that iPad sales haven’t really been affected by the Kindle Fire from Amazon (AMZN), which is no doubt contributing heavily to the success of Android tablets. It’s also likely that the Nook Color and Nook Tablet from Barnes & Noble (BKS) are included in the Android figures. Instead, Cook admitted, the iPad has had some cannibalization effect on sales of Macs and he predicted that one day, the tablet market will be larger in volume than the PC market.
Compared to Android, Apple still holds the dominant position in the tablet market, with a 57.6 percent share, compared to Android’s 39.1 percent, according to Strategy Analytics’s most recent numbers. In terms of year-over-year growth, tablet demand has grown by 150 percent from the end of 2010 to that of 2011. In other words, even if shares were more evenly split, the iPad would still be seeing big gains in unit sales.
The PC market, on the other hand, contracted by about 6 percent in the fourth quarter of 2011, according to research firm Gartner. That’s despite 20 percent growth by Apple’s own Mac line of computers. Kevin Tofel recently pointed out here on GigaOM that half of all computing device sales are now for mobile units. If tablet and smartphone sales continue to grow and PC sales continue to decline, we’ll soon be in a position where mobiles are considered a primary device by a majority of users.
Andoid Tablets’ Pain Points
Apple will continue to sell iPads. A new refresh expected in the coming months might even help reverse its slipping market share. While the low-cost Kindle Fire may be a success, other Android tablet makers still seem to be having a hard time putting out products that excite consumers. Kevin wrote last week about how Android 4.0, while improving the Android tablet experience, still has a lot of glaring pain points. Also, Android’s tablet-specific app library lags considerably behind Apple’s and isn’t catching up nearly as quickly as the market on the smartphone side.
The companies putting out Android tablets that fail to achieve the Kindle Fire’s level of success are the same ones being hurt by the slowing PC market. They’re the ones that stand to lose most. Amazon’s Kindle Fire reportedly sold as many as 6 million units through the end of 2011, according to estimates, which would make it the world’s best-selling Android tablet.
Apple continues to appeal to a steadily growing audience of tablet users, but Amazon is answering the call of those who were happier buying bargain-priced netbooks for basic computing needs, rather than spending more on an iPad. That’s the market PC makers should have been trying to retain with their own tablet efforts. It’s the one Amazon has positioned itself to appeal to.
Also from GigaOM:
Tablet Wars: Apple Is From Venus; Amazon Is From Mars (subscription required)