Apple Will Continue to Rule Tablet Market (AAPL, IT, RIMM, HPQ, DELL, NOK, SSNLF, MSFT, GOOG, AMZN)

Investing

Published: September 22, 2011 10:40 am

Just in case anyone believed that Apple Inc. (NASDAQ: AAPL) was being seriously threatened by competitors to its iPad tablet, that belief can probably be put to rest for a few years. Combined sales of non-iPad tablets won’t pass Apple’s sales until 2015.

That’s the result of new research from Gartner, Inc. (NYSE: IT) published today. [http://www.gartner.com/it/page.jsp?id=1800514] Hardware makers Research in Motion Ltd. (NASDAQ: RIMM), Hewlett-Packard Co. (NYSE: HPQ), Dell Inc. (NASDAQ: DELL), Nokia Corp. (NYSE: NOK), and Samsung Electronics Co. Ltd. (OTC: SSNLF) are nearly invisible until 2012. Software platforms from Microsoft Corp. (NASDAQ: MSFT) and Google Inc. (NASDAQ: GOOG) don’t fare much better.

According to Gartner, tablet shipments in 2011 will total about 64 million units, with Apple getting about 73% of that total. Android-based devices get about 17% and the rest goes to RIM and HP. Next year, Gartner forecasts total unit sales of about 103 million, of which Apple gets 67%, Android gets about 22%, with the rest mainly to RIM and to Microsoft and presumably Nokia.

By 2015, Gartner estimates that 326 million units will be sold. Apple collects about 42%, Android-based devices get nearly 36%, Microsoft/Nokia get about 10%, and RIM’s QNX-based systems get about 8%.

Gartner noted that the estimate for Android-based devices would have been lower but for the success of the low-end products being sold in Asia. Even so, the research firm lowered its Android-based share estimate from 28% last quarter to 17% in this latest projection. The anticipated launch of a new tablet from Amazon.com (NASDAQ: AMZN) also kept the Android number from falling further.

The iPad has set the standard for tablets and other hardware makers are scrambling to make a device that offers the same functionality at a lower price. At the same time the competing software platform makers are trying to match the functionality of iOS. Making both these things happen is not trivial, especially when trying to compete on cost and still maintain margins.

Apple is repeating the success it continues to have with the iPhone, which still commands the lion’s share of profits in the smartphone space even though Android-based phones outnumber iPhones. As long as Apple commands the high ground for tablet functionality and profits, competitors will have a tough time meeting Gartner’s projections, even by 2015.

Paul Ausick

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