Apple's iPad suffers drastic decline in share of Chinese tablet market while cheap competitors grow
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.
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.
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.
Comments
Do these percentages add up to 100% for the quarter? Seems barely to add up to 60% with what is shown.
Quote:
Originally Posted by Daniel Epstein
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.
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.
Originally Posted by messele
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.
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.
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.
Quote:
Originally Posted by winstein2010
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.
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.
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.
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.
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.
No one can compete with those $20 ~ $50 so-called tablets running some crappy versions of Android.
Quote:
Originally Posted by sog35
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.
You make a good point, however you better believe Louis Vuitton cares about cheap Chinese knockoffs...which is basically what Android tablets are!
Exactly why Apple never has and never will attempt to compete solely on price. It's a losing game.
There was NEVER going to be a serious injection of cash...