Consumer Electronics
Has Apple's Tablet Business Run Out Of Time?
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Just as Apple (NASDAQ: AAPL) has a successful launch of its new iPad 2, some industry experts see its dominance in the sector fading. This is despite some Wall St. firms’ estimates that Apple sold as many as one million units of its new product last weekend. Apple’s iPad sales will slow sharply in the next year or so, according to the research.
According to the DisplaySearch Q1’11 Touch Panel Market Analysis update, touch screen shipments for tablet (or slate) PCs are forecast to reach 60M units in 2011. Apple will likely continue to account for the majority of tablet PC touch screens in 2011 and 2012, yet other brands could catch up in 2012 and beyond. DisplaySearch forecasts total touch panels for tablet PCs to reach 260M units in 2016, up 333%.
DisplaySearch assumes that tablets being introduced by Research In Motion (NASDAQ: RIMM), Samsung, Dell (NASDAQ: DELL), and others will take market share away from Apple quickly. The features of these new tablets will be advanced and attractive enough that the features of the iPad will not be sufficient to allow Apple to keep 80% of the market of even 60%. That is a lot to assume. Most of the machines from these other companies have not been introduced so it is impossible to gauge their sales. If they are good enough to catch the buying public’s imagination, Apple’s tablet share could drop to 30% or lower in two years. The DisplaySearch research does not account for the possibility that these new tablets won’t be a hit.
Research companies and analysts are scrambling to get publicity and make their names based on forecasts about Apple’s future. In the past, many of these predictions have been wrong. Almost no one saw the success of the iPod coming. The Mac was supposed to remain a niche product in part because company IT managers did not want to support any operating system other than Windows. Now many of these managers support Linux, Windows, and the Apple and RIM operating systems. That is based on the needs of their workforces and the waning of Windows as the primary platform for all corporate computing especially on mobile devices.
Apple’s fortunes may well turn down because the iPad’s success is temporary. DisplaySearch may get its name in the media for one or two days. Another analyst will release interesting and perhaps controversial forecasts about Apple next week, and the week after. None of them will be better than the one before.
Douglas A. McIntyre
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