Apple’s iPad has been dominating the tablet market.
Since 2010 Apple has sold more than 84 million iPads around the world and controls 68% of the tablet market as of Q1 2012. Neither Microsoft, Google, Amazon, Samsung nor any major competitor has gained any notable market share with their own full size tablet. The one exception to Apple’s control of the tablet market is in mini tablets, such as the Nexus 7 and Kindle Fire.
Amazon released the Kindle Fire in 2011 at a starting price of $199. Running a heavily modified version of Google’s Android OS, its screen size is only 7 inches compared to the iPad’s almost 10 inch screen. Google released the Nexus 7 this year, and has already received high reviews from tech blogs and websites. So how have these two tablets fared against the competition? If we remove the iPad from the field, and mini tablets are dominating the remaining market. Larger tablets (such as the Motorola Xoom and Samsung Galaxy Tab) simply haven’t succeeded against their smaller competition, possibly because of the direct competition with Apple for these higher priced tablets. For a price of $600 the iPad seems to be an easy choice for consumers according to the sale numbers, but for consumers with less to spend there are simply less options.
So what does this mean for Apple? Apple has had a history of using various solutions to keep competitors from entering the market beneath them and pushing them out. Price conscious consumers have been able to join the Apple ecosystem by buying older iPhone models or smaller products, such as the iPod Nano. The image below shows that right now Apple is lacking a cheaper alternative for it’s pricey tablets. Google has exploited this opening in the market before. Android was originally launched on cheaper devices to get a foothold in the mobile space. Eventually it moved on to more premium devices (Such as the Nexus S or Galaxy III).
I’m sure Apple is taking notice of the success of smaller tablets. We’ve been reporting rumors of an iPad Mini to be announced with the iPhone 5 for about a month now. Are these rumors true? Based on the analysis above I would certainly think Apple is going to offer a low cost solution. However it doesn’t have to be a new tablet. A $200 iPad Mini would certainly put the world’s biggest tablet maker back in direct competition with other manufacturers but Apple could also discount the price of the iPad 2. Based on Apple’s history of discounting iPhone models, the discounted option might make more sense. They need to do something because for now mini tablets seem to be the one piece of tablet market Apple doesn’t have cornered.