Research group International Data Corp. issued its Worldwide Quarterly Media Tracker and eReader Tracker report for the March quarter last Friday, noting that overall shipments fell short of the predictions. The report emphasized the iPads success in the tablet space, noting that Apples iPad and the recently introduced iPad 2 continue to dominate the media tablet market, as other vendors have had a more difficult time finding market acceptance for their products.
But, it wasnt all good news for the Cupertino, Calif.-based company. According to IDC, the number of Apple shipments in the first quarter fell well below expectations. The group attributed the miss to supply-chain hiccups and the typical pre-release announcement of the iPad 2 several weeks before availability.
Apple has had difficulty meeting the overwhelming demand for the iPad 2. The company ended last quarter with a substantial backlog, though lead times for the device on its online store recently improved to just 3-5 days, down from estimates of 1-2 weeks.
The company sold 4.69 million iPads in the March quarter, short of Wall Street consensus expectations of 6.2 million. Given IDCs estimate of 7.2 million media tablets sold in the first quarter, Apples touchscreen tablet made up 65 percent of the market, down from 73 percent share last quarter.
Tablets running Googles Android mobile operating system grew to a 34 percent market share on a sequential increase of 8.2 points. On the e-reader side, Barnes & Nobles Nook Color dethroned Amazons Kindle to become the top-selling e-reader for the first time.
The report noted that the iPads primary competitors, Samsung and Motorola, have found moderate success by focusing on preexisting distribution partnerships with mobile phone retailers. However, consumer reluctance to sign up for 3G and 4G data plans for tablets has stunted sales for the mobile handset makers.
"Like the PC market, Media Tablets had a bit of a challenging quarter in Q1, as concerns about general macroeconomic issues and the post-holiday letdown took a toll on demand," said Bob O'Donnell, IDC Vice President, Clients and Displays. "We expect the rest of the year to be much stronger, but we believe vendors who continue to focus on the telco channel for distribution will face serious challenges."
Despite the first-quarter hiccups in the tablet market, IDC remained confident in continued growth of the industry, raising its projection for the year from 50.4 million units to 53.5 million units. "Although media tablet sales were not as high as expected in 1Q11 due to slower consumer demand, overall economic conditions, and supply-chain constraints, we believe with the entrance of competitive new devices in second half of 2011, the market will sell close to 53 million units for the year and continue to grow long-term," said research analyst Jennifer Song.
Competition in the market is expected to heat up even further over the next 12 months as a variety of new tablets join the fray. HP just released the webOS-based TouchPad, while Dell is collaborating with Microsoft on Windows tablets. Meanwhile, Apple is expected to deliver a new iPad, with recent reports suggesting that it will have a higher-resolution display.