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Apple's iPad suffers drastic decline in share of Chinese tablet market while cheap competitors grow

post #1 of 64
Thread Starter 
The second quarter of calendar 2013 saw Apple's share of sales in the Chinese tablet market drop significantly, to less than 30 percent, according to the latest data released by research firm IDC.

IDC


Despite losing its traditionally ironclad grip on the market ? Apple has, to date, usually maintained more than 50 percent market share in China ? the Cupertino company shipped nearly 3 times as many tablets as rival Samsung, its closest competitor. Apple took in a 28 percent share on 1.5 million units shipped, according to IDG News Service, while Samsung rang in with an 11 percent share while shipping 571,000 units.

Lenovo came in third with 8 percent on shipments of 413,000 units, and Asus, Acer, Huawei, Teclast, Onda, ZTE, and Microsoft rounded out the top 10 with 1 percent each. Notably, Amazon ? whose Kindle Fire tablet officially debuted on the mainland in June ? brought home less than one percent of the market in its inaugural quarter.

IDC analyst Dickie Chang attributed the lag in iPad shipments, down from 3 million in the first quarter, to inventory draw downs ahead of a hardware refresh. New versions of the iPad and iPad Mini are widely expected before the important holiday quarter.

The report went on to note that an uptick in demand for tablets running Google's Android operating system benefited not only electronics powerhouses Samsung and Lenovo, but also little-known "white box" vendors - low-volume manufacturers who market low-cost, feature-laden tablets.

?[The consumers] can use Android tablets from Samsung, Lenovo, or others from small white box vendor guys because the price is cheap," said Chang. "Some of these Android tablets, like those from Chinese vendor Onda, can start as low as 699 yuan ($113), and come built with a quad-core processor, 8-inch screen, and 5-megapixel camera."

The iPad's decline in China continues a recent trend for Apple as consumers around the world increasingly opt for Android tablets or Microsoft's Surface devices. An IDC report from early August showed Apple's worldwide shipments sliding by 14.1 percent year over year, while the company's worldwide tablet market share fell from 60.3 percent to 32.4 percent in the same period.
post #2 of 64
Cheap models grow ... as HP did in the past ... till bancrupsy.
post #3 of 64

Do these percentages add up to 100% for the quarter? Seems barely to add up to 60% with what is shown.

post #4 of 64
Mmm this anal-yst failed to point out the current iPad is in end of life and due to be refreshed this falls. Besides, cheap knock-off will always get the lion shares in term of units, not so much in terms of profit for content developers on theses platform.
post #5 of 64
Quote:
Originally Posted by Daniel Epstein View Post

Do these percentages add up to 100% for the quarter? Seems barely to add up to 60% with what is shown.

 

I wondered about the same thing. If the "white boxed" product was taking over, as the article says, then the "other" bar should have picked up the slack and been the tallest bar on the chart...???

 

Oh well, in 90 to 120 days the "white boxed" product will have died and Apple will be there to offer something new and improved.

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"That (the) world is moving so quickly that iOS is already amongst the older mobile operating systems in active development today." — The Verge
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post #6 of 64
"During the quarter, 46 percent of all tablet shipments to China came from vendors IDC classified as %u201Cothers%u201D, which individually claimed a market share of less than one percent. Many of these vendors included small white box device makers, as well as Amazon, which began selling its Kindle Fire tablet in China in June."

In other words, China does what China does. Buy tank loads of cheap crap that is being palmed off as being "more or less" just like the expensive premium items.

Then said items electrocute the user. The rest of the world feigns shock.
post #7 of 64
Originally Posted by messele View Post
Then said items electrocute the user. The rest of the world feigns shock.

 

BA HA HA HA HA HA HA! I know you didn't intend that, but it was GREAT.

Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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Originally posted by Marvin

Even if [the 5.5” iPhone] exists, it doesn’t deserve to.
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post #8 of 64

There are Android tablet that sells for $59, Apple will not, and should not even bother to compete in that price range.

 

Many people don't remember this or even read about it:  In 1983-1985, the video game console market crashed due to a saturation of cheap consoles and low quality games.  Video game revenue went from $3.2 billion in 1983 to $100 in 1985.

 

Tablet market could crash for Android if consumers lose confidence in the ecosystem.

post #9 of 64
Cheap sh1t sells and then are tossed in landfills.
post #10 of 64

Considering market share figures are really only useful for developers, and said developers likely aren't targeting whitebox tablets, wouldn't a better view of Apple's health be gained by looking at revenue share?

 

This would equalize for those cheap $60 tablets that are supposedly flooding the market.

post #11 of 64
There's this media hard-on for market share as if that determines success. It alone does not. Apple could win 80% if it sold the iPad below cost but that doesn't pay the bills.
post #12 of 64
Quote:
Originally Posted by winstein2010 View Post

There are Android tablet that sells for $59, Apple will not, and should not even bother to compete in that price range.

 

Many people don't remember this or even read about it:  In 1983-1985, the video game console market crashed due to a saturation of cheap consoles and low quality games.  Video game revenue went from $3.2 billion in 1983 to $100 in 1985.

 

Tablet market could crash for Android if consumers lose confidence in the ecosystem.

Actually this is not entirely true, the 1983 video games crash was mostly due to poor software more than poor hardware.  At the time the battle was between 3 main players: Atari, Coleco and Intellivision.  But most games for those platform was so poorly made (remember the E.T. fiasco) and without any way to really know what the game was about without buying first was deceiving for many.  This is why Nintendo had his seal of approval on every cartridge and limited games publisher to publish only 3 games per years on the NES, making sure only the best games will goes retail.

post #13 of 64
Quote:
Originally Posted by messele View Post

"During the quarter, 46 percent of all tablet shipments to China came from vendors IDC classified as %u201Cothers%u201D, which individually claimed a market share of less than one percent. Many of these vendors included small white box device makers, as well as Amazon, which began selling its Kindle Fire tablet in China in June."

Then why does the 'Others' column show only 1-2% in the chart?

Seems to me that the people who did that report are fairly clueless.
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"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #14 of 64

This is SILLY BS.

 

Do you think LOUIS VUITTON is concerned about Garbage Bag sales?

 

Do you think BMW is worried about Kia sales?

post #15 of 64

Something fishy with this chart... total market seems to be only 55% of "market share".   I doubt "white box" vendors are selling the other 45% of the market share.  So I can only conclude this analysis is flawed.  No big surprise there.

post #16 of 64
Well, I'm sure there is also pent up demand being created with the pending announcements of new iPad and iPad mini announcements in the next couple of months.

Every year this happens. A new product comes out, sales boom, market share increases, 10 months later, sales drop right before a new product announcement, and then BOOM (as Steve Jobs would routinely say), more sales, more market share. This has been going on with this seesaw sales cycle on practically every product for YEARS.
post #17 of 64

That's why I always said and still believe, that the whole hype about developing countries and markets is highly overrated, at least for certain product categories.

 

Apple has always been a premium brand, sticking out of the crowd and being known for, even by non-users, for its quality, design and user experience. Steve Jobs once said "we don't build junk" and Apple has always been following this line. Looking back, history has proven them right, when it comes to success, innovation and most importantly profits.

 

While I do believe that a mid range iPhone might be a good idea for the ecosystem's sake (third party developers, etc), we already have a mid range tablet with the iPad Mini. I don't believe Apple should chase after these markets with more efforts than it is doing now.

 

Reality is, most people that care for quality in those markets, just like in ours go for Apple. Those that can't currently afford so, will do so once they can. I also don't think there is a lot of vendor or platform lock-on happening in the lowest ends of the market. All those cheap junk devices come without Google Play, come with crappy own App Stores, etc. Whomever incests 100$ or less in a tablet will hardly be able to invest a lot in software. Once those markets grow and develop further, peoples' spending power will rise and then they will come for Apple products on a larger scale.

 

However, trying to compete in those markets against those insanely cheap and junky competitors is pure suicide.

post #18 of 64

No one can compete with those $20 ~ $50 so-called tablets running some crappy versions of Android.

....the lack of properly optimized apps is one of the reasons "why the experience on Android tablets is so crappy".

Tim Cook ~ The Wall Street Journal - February 7, 2014

Inside Google! 

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....the lack of properly optimized apps is one of the reasons "why the experience on Android tablets is so crappy".

Tim Cook ~ The Wall Street Journal - February 7, 2014

Inside Google! 

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post #19 of 64
Quote:
Originally Posted by sog35 View Post

This is SILLY BS.

 

Do you think LOUIS VUITTON is concerned about Garbage Bag sales?

 

Do you think BMW is worried about Kia sales?

 

They'd be worried if people buying Kia were those who would've bought BMW if Kia didn't exist. 

 

In the end, yes, people who bought cheap tablets, some of them would've bought an iPad. iPad, especially with mini, is not as 'premium' as people here are thinking. At $329, a lot of people in China can buy 1 if they really want it, but if there's Android tablet selling for $99, well, even if it's crap, it can still be used to read books, play video, use facebook/email/web, etc, and people will just say 'ok it's bad but it's cheap enough so I don't have to save up to buy a $329 iPad mini. 

post #20 of 64
Quote:
Originally Posted by sog35 View Post

This is SILLY BS.

Do you think LOUIS VUITTON is concerned about Garbage Bag sales?

Do you think BMW is worried about Kia sales?

You make a good point, however you better believe Louis Vuitton cares about cheap Chinese knockoffs...which is basically what Android tablets are!

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #21 of 64
Quote:
Originally Posted by Disturbia View Post

No one can compete with those $20 ~ $50 so-called tablets running some crappy versions of Android.

Exactly why Apple never has and never will attempt to compete solely on price. It's a losing game.

Proud AAPL stock owner.

 

GOA

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Proud AAPL stock owner.

 

GOA

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post #22 of 64
Considering purchases of cheap Android tablets as the loss of a sale to Apple is like comparing the downloading of a movie torrent as the loss of a sale to movie-makers.

There was NEVER going to be a serious injection of cash...
post #23 of 64

Apple never worries. Here comes the new iPad!

post #24 of 64
There seems to be a never-ending concern about market share which I fail to see of having any value except on Wall Street. I wonder if even most consumers are happy getting cheap junk that should probably be outlawed due to waste of materials. The only good thing about it is I suppose it's giving people employment. Otherwise, what good is a cheap product if it's only going to end up as landfill in a few months.

I'm sure market share isn't significant for Apple if a hundred companies are shipping low-end Android tablets. Is there any proof that consumers are even using these cheap tablets to any degree. I'm sure they must have some issues. Even cheap pocket calculators of years back had issues of problematic displays and unresponsive keys. I can only imagine the issues a $75 or $100 Android tablet could have. I don't see how Wall Street could be rejoicing over this sort of market share race. It's like they actually want consumers to own poorly made goods. That's not even good for poor consumers if a product has a high failure rate.

The news media has the biggest hard-on for market share I have ever seen. I fail to see how any of it matters. Companies either make money or they don't. It doesn't matter how much market share they have. Nokia had major cellphone market share at one point and at the same time they were bleeding cash and headed towards insolvency. Why doesn't Wall Street understand any of this?
post #25 of 64
Quote:
Originally Posted by messele View Post

"During the quarter, 46 percent of all tablet shipments to China came from vendors IDC classified as %u201Cothers%u201D, which individually claimed a market share of less than one percent. Many of these vendors included small white box device makers, as well as Amazon, which began selling its Kindle Fire tablet in China in June."

In other words, China does what China does. Buy tank loads of cheap crap that is being palmed off as being "more or less" just like the expensive premium items.

Then said items electrocute the user. The rest of the world feigns shock.

There were articles actually blaming Apple because Apple-certified chargers were too expensive and it drove consumers to buy non-Apple chargers.  Apple always seems to be at fault for reasons that make very little sense.

post #26 of 64
Quote:
Originally Posted by AppleInsider View Post

The iPad's decline in China continues a recent trend for Apple as consumers around the world increasingly opt for Android tablets or Microsoft's Surface devices. An IDC report from early August showed Apple's worldwide shipments sliding by 14.1 percent year over year, while the company's worldwide tablet market share fell from 60.3 percent to 32.4 percent in the same period.

Surface RT? Seriously?

 

What does 'increasingly opt for' mean in the case of Surface RT? In this case, from less that 1% (actually from 0%) to 1%?

 

All percentages including the category 'others' add up to 55%. Something is definitely very wrong here.

post #27 of 64
Quote:
Originally Posted by MacHarry de View Post

Cheap models grow ... as HP did in the past ... till bancrupsy.

What's crupsy, and why did they ban it?
post #28 of 64
Quote:
Originally Posted by sog35 View Post

This is SILLY BS.

Do you think LOUIS VUITTON is concerned about Garbage Bag sales?

Do you think BMW is worried about Kia sales?

Of course LV is concerned. The quality of Chinese knockoffs has improved immensely. Many Italian bag makers use Chinese factories whenever they're overwhelmed with orders, then the Chinese use what they've learned to make almost indistinguishable copies.
post #29 of 64
Time for a gold colored iPad?

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #30 of 64

Apple made a serious mistake not putting the gps chip inside iPad wifi models.  After three years numerous tablet apps wants the location of the device. 

post #31 of 64
Quote:
Originally Posted by drobforever View Post

They'd be worried if people buying Kia were those who would've bought BMW if Kia didn't exist. 

In the end, yes, people who bought cheap tablets, some of them would've bought an iPad. iPad, especially with mini, is not as 'premium' as people here are thinking. At $329, a lot of people in China can buy 1 if they really want it, but if there's Android tablet selling for $99, well, even if it's crap, it can still be used to read books, play video, use facebook/email/web, etc, and people will just say 'ok it's bad but it's cheap enough so I don't have to save up to buy a $329 iPad mini. 

If people in China didn't have a choice of a Kia they wouldn't buy a BMW if it were their only choice if they couldn't afford it - they'd stick to their bicycle, electric bike or the bus. (BTW - Facebook is blocked in China!) The fact of the matter is that the rapid expansion of the tablet market in these countries is happening at the low end, and is not part of Apple's addressable market. Therefore their unit market share is bound to decline, but their revenue and profit share will keep them well in the lead.
post #32 of 64
I found the bit at the end about consumers are increasingly opting for Android annoying because its the standard low grade unsophisticated analysis you can read in the antiApple press and you'd think Appleinsider would get a bit deeper.

Consumers are moving up from feature phones because feature phones are disappearing from shops around the world and Android POS cheap phones running 2 year old versions of Android are replacing them. And if you're poor, need a phone and don't really care about apps and browsing the web and buying from Amazon and such, you'll buy what the dude in the shop suggests to you and at those prices it won't be any flavour of iPhone. Everyone knows or should know if they work in the field of consumer tech reporting that the number of phones and tablets on a y/y basis that Apple is shipping is growing with seasonal q/q fluctuations. That these ultracheaps are being bought by the massive number of slightly upwardly mobile but still very poor peeps mentioned above does not suggest that Apple is losing anything, not revenues, not profits, not desirability of brand and as such the above wording is misleading.. Apple continue to make exuberant profits although their rate of growth has slowed as the market saturated. Apple remains a powerhouse in the market segments it competes in and Apple management would get hired in a minute by world class firms where they too leave which they choose not todo because they're bloody pleased to be working on changing the world.
post #33 of 64
Quote:
Originally Posted by Soloman View Post

Of course LV is concerned. The quality of Chinese knockoffs has improved immensely. Many Italian bag makers use Chinese factories whenever they're overwhelmed with orders, then the Chinese use what they've learned to make almost indistinguishable copies.

Actually it's not the case at all. Most urban Chinese consumers now want the real thing - in fact China is now the second largest luxury goods market in the world and will become the largest in the next few years if the current trend continues. For instance, woman making only a few hundred a month will save up just to buy a real LV bag. They want to be able to show it off. There has been a dramatic shift in China on this front. That is not to say that knockoffs don't exist, and aren't getting better in quality, but the reality is that now many of those are shipped overseas.
post #34 of 64
Quote:
Originally Posted by FreeRange View Post

Actually it's not the case at all. Most urban Chinese consumers now want the real thing - in fact China is now the second largest luxury goods market in the world and will become the largest in the next few years if the current trend continues. For instance, woman making only a few hundred a month will save up just to buy a real LV bag. They want to be able to show it off. There has been a dramatic shift in China on this front. That is not to say that knockoffs don't exist, and aren't getting better in quality, but the reality is that now many of those are shipped overseas.

I wasn't referring to the Chinese market. There's a huge market for quality made knockoffs in the USA.
post #35 of 64
Quote:
Originally Posted by tzeshan View Post

Apple made a serious mistake not putting the gps chip inside iPad wifi models.  After three years numerous tablet apps wants the location of the device. 

This again.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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post #36 of 64
If I were TCook, I would be shocked, shocked I tell you, because there is no reason that Apple shouldn't exhibit the same market share numbers in China (per capita GDP $10,000) as they do in the US (per capita GDP $50,000).

Now, did I get that double negative right and end up saying what I meant to say?
post #37 of 64

There are sub $100 7" tablets in China, they suck, at least the one I tried, forget about hi-dpi, or regular dpi, it was low dpi.

post #38 of 64
Quote:
Originally Posted by All Day Breakfast View Post

Apple continue to make exuberant profits although their rate of growth has slowed as the market saturated.

 

You might have meant 'exhorbitant' but 'exuberant' actually works better!  :-)

post #39 of 64
If tablets are selling on low price in China, then why did the low-priced Kindle Fire not take more than 1% of the market?
post #40 of 64
Quote:
Originally Posted by 512ke View Post

If tablets are selling on low price in China, then why did the low-priced Kindle Fire not take more than 1% of the market?

It is like what I said above.  The Kindle Fire lacks several key components to make it more useful. 

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