JP Morgan: Apple's iPad rivals reduce build plans after 'early dose of reality'

Posted:
in iPad edited January 2014
A new investor report from J.P. Morgan on Wednesday indicates that Apple's competitors in the tablet market have reduced their build plans after receiving an "early dose of reality" in the form of lackluster sales.



According to analyst Mark Moskowitz aggregate tablet build plans have declined by roughly 10 percent since early March. Moskowitz took the reduction to mean that "non-Apple tablet hopefuls have adjusted to the weak showing so far."



Describing the trend as an "early dose of reality," the analyst noted that the market has yet to see a high-volume tablet competitor to the iPad. Moskowitz cited Asustek?s Eee Pad Transformer, Motorola?s XOOM, RIM?s PlayBook, and Samsung?s Galaxy Tab as examples of tablets that have failed to gain traction and whose makers have consequently reduced build plans.



In early March, Moskowitz warned of "increasing risk of a bubble burst" to the tablet market in the second half of 2011 because of exaggerated build plans from tablet makers. Moskowitz saw Apple's iPad 2 as making it tougher for rival first-generation tablets "to play catch-up," which would result in poor sales. The recent reduction in production volumes has allayed some of the firm's fears of a tablet bubble.



Moskowitz acknowledged that extrapolating trends from build plans can be problematic, noting that the firm applies discounts to adjust for limitations. J.P. Morgan now projects 2011 build activity for the tablet market to come in at 63 million after a discount of 14 percent. The firm had previously applied a 20 percent discount to arrive at a 65 million unit estimate, but reduced the rate after tracking "widespread reductions in build activity" in recent months.







According to the analyst, the "nascent tablet market stands to become big enough to create a ripple effect in the broader tech food chain" in 2011. Total tablet shipments in 2011 will reach just 3 percent and 11 percent of total handset and smartphone units, respectively. However, when compared against desktop and notebook PC units, tablet shipments will reach 32 percent and 21 percent respectively. Thus, "tablets stand to be big enough to have positive (or negative) spillover effects" in the broader market, Moskowitz said.







Moskowitz sees "limited upward pressure" in build activity occurring throughout the summer, adding that any increase will likely come from Apple. Some tablet makers are waiting to "see how the back-to-school reception is," while others are waiting to roll out 4G LTE tablets, he said.



Apple admitted in April that it was experiencing the "mother of all backlogs" with the iPad 2 and had sold every unit it could make last quarter. Production constraints for the iPad 2 have caused Wall Street analysts, including Moskowitz, and research firms to lower their shipment estimates for the year. J.P. Morgan currently estimates Apple will ship 6.75 million iPads in the June quarter
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Comments

  • Reply 1 of 79
    magicjmagicj Posts: 406member
    Tip to Apple competitors in this area: Make sure the person in charge of developing these products can tell the difference between a large piece of burnt toast and a tablet.



    You can't wave around a piece of over-priced useless junk and expect people to buy it.
  • Reply 2 of 79
    elliots11elliots11 Posts: 270member
    Ha ha. It's easy to laugh when these guys waited for Apple to innovate, then slapped together some cheap parts with unintuitive software and thought they'd fool everyone with their half assed knockoffs. Apple invented this market of tablets closely tied to smart phone parts, they thought of everything In detail way in advance. They had the vision, literally everyone else copied, poorly. The only ones who seem to be doing QA and thinking it through are HP. Maybe they'll have a viable hit, or maybe they're just slow. Guess we'll see.
  • Reply 3 of 79
    ahmlcoahmlco Posts: 432member
    What magicj said. To date, almost no one has hit on functionality, style, size, and price.



    No one offers a superior experience, and almost every one suffers from some fatal flaw on the software side of the fence. (No email RIM? Really?)



    At best, their primary reason to buy seems to be: "Hey! We have a tablet too!" When that gets no response they then frantically play the Flash card, to which many people (including me) yawn and say, "Who cares?"



    I get along just fine without it, and the lack of Flash blocks the majority of the annoying animated advertising that's infected the web. They then switch to processor speed and the number of USB ports, which endears them to the geek market but that's about it. As Steve said, "If all you can talk about is processor speed, you're missing the point."



    Come on people! Surprise us! If you want to sell us your gear, then show us something NEW. Don't just slap Android on a stock design, or resort to some lame trick like Flash, or, as in the most recent RIM Playbook ads, tout the ability to play a movie in the background where I can't see it.



    Stop with the "me too" product line, and show us SOMETHING we haven't seen before...
  • Reply 4 of 79
    dlcmhdlcmh Posts: 43member
    I just use iSwifter on the iPad if I have a burning need to view Flash web content.
  • Reply 5 of 79
    asdasdasdasd Posts: 4,945member
    Remember at 63M - the iPad is still just in the lead, down from 100%. The question is whether it can continue above 50%
  • Reply 6 of 79
    mdriftmeyermdriftmeyer Posts: 7,100member
    By this time, next year, the iPad will have well surpassed 100 million installed units.
  • Reply 7 of 79
    cy_starkmancy_starkman Posts: 489member
    Something else to think about. Perhaps the current size of the buying market is only 7-10million a quarter.



    I have found many of the Android generic phones, like the original G1 are junk compared to an iPhone. Yet they sold enough per manufacturer to give them some traction each.



    There simply is no room for anyone else to sell volume. All the associated factors don't help. At least an android phone was a phone. A tablet without all the supporting story going on is just a crap ass computer.
  • Reply 8 of 79
    kaptainkkaptaink Posts: 18member
    The iPad HW isn't selling the iPad, the iTunes 'ecosystem' is. Easy to purchase content and apps is the killer feature. Android still continues to be too fragmented.
  • Reply 9 of 79
    mac.worldmac.world Posts: 340member
    Quote:
    Originally Posted by asdasd View Post


    Remember at 63M - the iPad is still just in the lead, down from 100%. The question is whether it can continue above 50%



    Remember, at 63M, the iPad is the only tablet to have sold more than 2M. Yep, still 'just' in the lead.
  • Reply 10 of 79
    Quote:
    Originally Posted by cy_starkman View Post


    At least an android phone was a phone. A tablet without all the supporting story going on is just a crap ass computer.



    Excellent point. A tablet as an adjunct to a pc, and still dependent on one, is useless to anyone who doesn't need the portability. And if you need the portability, you want compatibility with your existing platform. Android doesn't provide that for Windows users, and if it did Windows users are less likely to fork over money for apps they [perhaps] bought already for their pc's.



    The real market for tablets is when they can be a straight out replacement for, or in lieu of, a pc.
  • Reply 11 of 79
    magicjmagicj Posts: 406member
    Quote:
    Originally Posted by KaptainK View Post


    The iPad HW isn't selling the iPad, the iTunes 'ecosystem' is.



    Bingo!



    [OFF TOPIC RANT]

    Hopefully in the very near future, Apple will release improvements to these stores that improve the shopping experience even more.



    I ask Steve Jobs to go into an Apple store and walk around and notice how easy it is to find the products you were looking for and discover new products you didn't even know you wanted when you walked in.



    Then go into the various online stores Apple runs, iTunes, App Store, iBook Store, and try to recreate that experience.



    Can't be done.



    Right now Apple has the lead in the market, but if they don't find a way to improve the shopping experience in their on-line stores, sooner or later one of their competitors will. Perhaps the nook already has.

    [/OFF TOPIC RANT]
  • Reply 12 of 79
    chabigchabig Posts: 614member
    Quote:
    Originally Posted by AppleInsider View Post


    A new investor report from J.P. Morgan on Wednesday indicates that Apple's competitors in the tablet market...



    There is no tablet market. There is only an iPad market.
  • Reply 13 of 79
    The competition just seem to be copycats. Their products exist 'cause they don't want Apple to be too far ahead in this market or it'll be nearly impossible to catch up. So their solution is to rush half-assed products out (both hardware and software) so that consumers shouldn't think this is an Apple only space. The longer consumers think that way, the more irrelevant the competition becomes. It looks like they made tablets because of Apple's success and didn't put any thought into an 'ecosystem'. And that is a deal breaker for me as a consumer. Companies like that will remain 2nd rate in my eyes.
  • Reply 14 of 79
    d-ranged-range Posts: 396member
    Quote:
    Originally Posted by elliots11 View Post


    They had the vision, literally everyone else copied, poorly. The only ones who seem to be doing QA and thinking it through are HP.



    That was after they tried to get a piece of the tablet market with their Windows-based 'HP Slate' disaster, and decided they needed Palm to get their show on the road, of course



    But I agree, I'm almost rooting for HP to get it right, because the tablet market is decidedly boring right now. You have the iPad, but I already know that because I have one. Then you have a million Android tablets that don't interest me the least bit since they are all the same, they all have the same ugly convoluted UI (this is a personal opinion), none of them have any applications worth mentioning, the people talking about them on the internet all come off as absolute pricks to me, and they are marketed in a way that is as appealing to me as riding a bike without a saddle. Last but not least you have a few strange outcasts such as the Playbook, that don't fit into any category and try to be different, but unfortunately just plain suck because they are alpha hardware & software at best.



    I'd love to see some real progress, some innovation, something that might stir up the market and introduce some new features or technology that even Apple can learn from. HP/Palm is my only hope for that, I know it's a really long shot, but that's just how things are right now. Which nicely illustrates how Apple single-handedly defined this market and will most likely be in control at least until after iPad 3 is released.
  • Reply 15 of 79
    maccherrymaccherry Posts: 924member
    Quote:
    Originally Posted by elliots11 View Post


    Ha ha. It's easy to laugh when these guys waited for Apple to innovate, then slapped together some cheap parts with unintuitive software and thought they'd fool everyone with their half assed knockoffs. Apple invented this market of tablets closely tied to smart phone parts, they thought of everything In detail way in advance. They had the vision, literally everyone else copied, poorly. The only ones who seem to be doing QA and thinking it through are HP. Maybe they'll have a viable hit, or maybe they're just slow. Guess we'll see.



    HP didn't create webos from the bowels of their culture. No, they bought it now they are going to pimp it. HP is playing catch to the other guy's culture and it ain't going to pan out the way they think it will IMHO. HP spent a lot of money buying Palm just to ride the bandwagon created by Apple.

    I see the problem being the ability to get people to buy another webos tablet after they buy first one.
  • Reply 16 of 79
    anonymouseanonymouse Posts: 6,558member
    Quote:
    Originally Posted by Mac.World View Post


    Remember, at 63M, the iPad is the only tablet to have sold more than 2M. Yep, still 'just' in the lead.



    Are there any others that have actually sold 1M?
  • Reply 17 of 79
    ranreloadedranreloaded Posts: 397member
    Quote:
    Originally Posted by maccherry View Post


    HP didn't create webos from the bowels of their culture. No, they bought it now they are going to pimp it. HP is playing catch to the other guy's culture and it ain't going to pan out the way they think it will IMHO. HP spent a lot of money buying Palm just to ride the bandwagon created by Apple.

    I see the problem being the ability to get people to buy another webos tablet after they buy first one.



    Consfusing R&D with M&A... Can you say "Microsoft"?
  • Reply 18 of 79
    jm6032jm6032 Posts: 147member
    Quote:
    Originally Posted by chabig View Post


    There is no tablet market. There is only an iPad market.



    Thank You. I've had this thought for a long time and could not figure out how to express it. You did so, eloquently and concisely. We are all calling this a "tablet" market. Tablets have been around a long time. They went nowhere This is an iPad market.



    We also talk about an ecosystem. It's more. It's a vertically integrated fortress of products and services that people understand, can use, want, and pay for.



    The iPad is at the top of a series of products that starts with iPod's, iPod Touch's, and iPhones. People grew used to each one, each step up just adds something.



    Competitors will have a difficult time storming this castle. They must build their own.
  • Reply 19 of 79
    sockrolidsockrolid Posts: 2,786member
    There are some utterly horrendous craplets on the market. The ones that fall into the "other" category. For example:



    The "eLocity A7 7" Capacitive Touch Screen Android Tablet"

    http://www.elocitynow.com/



    The "Sylvania SYNET7LP 7-Inch Mini Tablet"

    http://www.androidtablets.net/forum/...-progress.html



    Here are 31 (yes, thirty one) "Cheap Tablet PCs"

    http://www.china-tablet-pc.com/cheap...t-pc-c-17.html



    And finally, if you thought those OLPC laptops were cheap at $100, here's a $35 Indian pad:

    http://articles.nydailynews.com/2010...itute-computer



    They're all knee-jerk reactions to iPad, by manufacturers who fell into the "cheaper means more market share" death-spiral-think. Greenpeace should whack these guys for creating such huge carbon footprints for so little return.
  • Reply 20 of 79
    sockrolidsockrolid Posts: 2,786member
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