Apple's Tablet Lead Narrows as Competitors Gain

Apple's iPad still leads but the various Androids are gaining.

That is the message presented by new research on the increasingly fragmented tablet market.

The significance is both financial and technological. On the technology, there have been questions about how Apple can continue to charge a significant premium over competitors' models and prevail. With household incomes in the US flat and incomes in China, the rest of Asia and Europe similarly impacted, the high cost strategy may provide margins that enable Apple to generate new products - and its reputation - but raise questions about whether price will undermine its long term dominance.

Financially, Apple stock movements account for a significant percentage of overall equity market activity, so threats to its dominance have a more far-reaching affect than the company's size might otherwise indicate.

As tablet sales threaten to overtake those of the PC, both the operational and financial issues will only gain in importance among followers - and of those looking to technology for signs of trends in the broader economy. JL

Ingrid Lundgren reports in Paid Content:

With the tablet market now overtaking PC sales, all eyes are on which platform will dominate this next generation of computing devices.

A report from Strategy Analytics said that for Q4 it was Apple (NSDQ: AAPL), the company that effectively created the market for tablets two years ago with the iPad — although its lead is continuing to narrow amongst an ever-increasingly crowded field of Android tablet makers. Apple, it said, remains the single-biggest company in tablets. Almost mirroring 15 million in iPad sales that Apple said it achieved for the quarter, SA says the iPad accounted for 15.4 million all shipments (not sales) in the quarter, compared to 10.5 million shipments of all Android-based tablets.

In terms of market share, that worked out to 57.6 percent for the iPad versus 39.1 percent for all Android tablets. Overall the market saw overall tablet shipments of 27 million units for the quarter, representing growth of 150 percent over the year before. For all of 2011, there were 66.9 million shipments, 260 percent higher than 2010.

The new report (link here) made very little of Microsoft’s tablet effort to date. It only has one percent of the market, and accounted for 400,000 shipments. Just as it had to do with smartphones, Microsoft (NSDQ: MSFT) will effectively be starting from scratch when it launches its next-generation OS, Windows 8, later this year. Rather damningly, the PlayBook from RIM (NSDQ: RIMM) doesn’t make it into the individual rankings, and instead gets lumped into “other” category with possibly a few straggling sales from the now-discontinued TouchPad from HP (NYSE: HPQ) running on WebOS.

Frustratingly, Strategy Analytics does not break out any estimates for how individual Android makers have done, although it does note that Amazon (NSDQ: AMZN), Samsung, and Asus (in that order) are driving volumes among the “dozens” of models on the market at the moment.

However, this does raise another issue: Given the ongoing fragmentation in the market — Amazon’s “forked” version of Android for the seven-inch Kindle Fire, for example, being very different from that of the Honeycomb-version of Android used in the Galaxy 10.1 — and the fact that this fragmentation does not represent much cohesion in terms of services, how useful it is to count all Android tablet shipments in one category, and, more generally, how accurate are those shipment figures when it comes to actual sales?