5 Mar 2013

Android Tablets Take Over in Q1: iPad Shipments Collapse

Tablet Display Shipments - NPD

Shipments of Android tablets overtook those of the iPad this holiday quarter. After this surge, I expected all players in the industry to see a major sequential decline in Q1. However, NPD's display shipment data suggests that the full-sized iPad is taking the biggest hit. Let's use this data to revisit our tablet market share projection for Q1.

The chart above shows NPD's tablet display shipments estimates for December 2012 and January 2013, by display size. Display shipments are delivered to OEMs as an input to the tablet manufacturing process, so they are a leading indicator of tablet shipments, i.e. displays are likely to be used in manufacturing and shipped in the following month(s). So display shipments in December and January should explain ~70% of tablet shipments in Q1 2013, assuming yield rates remain constant across all tablets.

Tablet Display Shipments by Platform

The problem with NPD's data is that it gives us a view of shipments by display size and not by tablet platform. Luckily, OEMs using specific platforms have consolidated around a few popular screen sizes. The full-sized iPad is responsible for the vast majority of 9.7" display shipments, while the iPad Mini may be the only tablet with a 7.9" display. Similarly, most Windows 8/RT tablets are sized at 10.1" and above, while Android tablets make up the rest (Shipments of the 7" Blackberry Playbook can be considered negligible). Since the bulk of Android tablets are sized at 7" and 10.1", Windows 8/RT tablets may be responsible for just 2-3% of 10.1" display shipments based on Q4 figures. This gives us the following shipment pattern by platform:

Tablet Display Shipments by Platform

As we can see, iPad display shipments seem to have dropped by about half from December to January. This fall can be attributed to a ~80% drop in shipments of full-size iPad displays. Meanwhile display shipments for the iPad Mini have remained strong. Unless Apple has a new full-size iPad on the way with a 10.1" display, this strongly hints at a collapse in sales because of cannibalization from the iPad Mini. My iPad Mini cannibalization estimate was far more aggressive than others, but actual cannibalization seems even worse.

Meanwhile, shipments of Android tablet displays have remained strong (in stark contrast with Q1 2012). Since developed market sales peak during the holiday quarter, this strongly suggests that emerging market demand for cheaper tablets is picking up. This also explains why shipments of 7" Android tablet displays are growing faster than 7.9" iPad Mini displays. In fact, 7" Android tablet displays (in January) seem to be outpacing all iPad displays (9.7" and 7.9") by themselves.

Tablet Market Share Projection - Q1 2013

Using the data from December & January, we get the following market share split by platform (approximation for Q1 2013):

Projected Tablet Market Share - Q1 2013

This projection is likely to be somewhat conservative for Android tablets. Display shipments in February are likely to be closer to January's figures, as compared to December, which puts the iPad's market share under even more pressure (although this could be balanced out by a new product launch in March). In addition to this, rising demand from emerging markets is likely to continue to boost Android tablet shipments. Meanwhile, Windows 8/RT tablets seem to be following in Windows Phone's footsteps. Based on these figures, emerging market demand seems to be forcing the tablet market in the same direction as the smartphone market, with Android firmly in the lead.

Follow-Up Post: The Curious Case of the iPad Shipment "Collapse"

21 comments:

  1. BS. iPad still best selling singular Tablet. Android coalition consists of hundreds of low-end Tablets, so what? Apple still owns high end segment, and profits.


    "Collapse" in the headline means this is just yet another anti-Apple slanted hyperbolic BS spin story.

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  2. Responses like this never cease to surprise me. The fact of the matter is that modular products seem to be overtaking integrated products, just as they did in the smartphone industry, the PC industry, and so on. This is a battle between platforms and not individual products/gadgets.

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  3. That doesn't mean Apple is going out of business. It just means that Apple's business model is not conducive for a dominant market presence.

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  4. That's unfounded. iPhone 5 outsold all competitors, completely beating out the GS3, while Apple had over 75% of Smartphone profits. All during a quarter where hyperbolic "doom and gloom" stories were calling for it to lose its leadership position.

    Apple is ONE company with one Tablet line. You're saying they're "collapsing" because they're getting gained on in terms of market share by a coalition of hundreds of generic devices who make no to little profits? Apple is a luxury brand, high margins, aspirational status, etc. Totally different business model.

    Therefore, iPads are still growing year over year, which is what is important to Apple.


    If Apple licensed out iOS to all these manufacturers, surely they can dominate in market share, but why would they? Low profits, low quality?


    Dollars and sense counts, which is where Apple is winning now more than ever.

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  5. Again, it does not matter if it's one device or many. This is a platform battle. The platform is a far more critical buying decision than the device itself.

    The collapse was referring to the shipments of the full sized iPad. The chart is fairly conclusive.

    Also, profits today are not indicative of profits tomorrow. Hardware is being commoditized (as always) and there's no shame in admitting that. Luxury brands don't survive in the technology industry if they don't disrupt (eg: the PC industry in the 80s and 90s). Apple's future lies in the next disruption, not in fighting lower priced competition that is "good enough" for the broader market.

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  6. If it is a "platform battle" then look at the platform, not just the "full sized iPad". So you have however many vs 1/2 of Apple's offering? And you feel that's legit?

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  7. Is it really that hard to look at a chart? The whole point of the post was to consolidate NPD's data by platform. The collapse in full-sized iPad shipments in Jan, combined with roughly flat iPad Mini shipments equated to a collapse in iPad shipments.

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  8. Also, a one month reduction in the shipment of 1 part of a product signals nothing other than a one month reduction in the shipment of 1 part of a product.


    Have you ever been involved in manufacturing? This happens.

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  9. One month reduction, absolutely. Shipment orders are essentially to meet demand, which is a moving target - This affects inventory and WIP levels, it's all a linked chain. An 80% reduction (a drop much larger than any other previous measurement of iPad display shipments) is a fairly clear sign of a demand issue. iPad shipments and ASP in Q1 should give us a clear signal.

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  10. That's because only one company makes "iPads". Yet loads of manufacturers are making different Android tablets.
    "Low-end" for those that can't afford something super-fast.
    And more high-end ones for people who want something more out of their tablets.
    So yeah, compared to Android devices, over-expensive iPad sales are falling, but only because they're very market specific.

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  11. How do you know NPD's numbers of the 10.1 displays is accurate?

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  12. The only reason anyone would get this angry over analysis like this is either because they are an Apple shareholder, and they are worried this will affect their stock prices, or because they have an inexplicable devotion to apple. Maybe a religious one? http://www.dailymail.co.uk/sciencetech/article-1389256/Apple-brand-triggers-brain-reaction-similar-religious-devotion.html

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  13. Android is a fragmented platform vs. the unified iOS devices from Apple. Note that the older devices are handily upgradable compared to the bulk of Android that remained stuck in their original version. You just cannot compare apple and oranges. Apple mobile devices are growing their sales year over year still and that what counts. One manufacturers vs. one hundred others is not what I call a valid comparison position.

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  14. Are you claiming the S3 is low quality? You are right as a whole, but Google's business model is to dominate web browsing, and Android is wildly successful at doing that. I would argue the S3 is a far better piece of technology than the iPhone though. It really doesn't matter who has the best piece of handset technology though. Apple's plummeting stock prices have a direct correlation with their declining market share.

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  15. Game over, Apple. The better tablet and OS won. Win for open, loss for closed.

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  16. Shipments is the key word there. You have to look at sales, not shipments, and the different will be enormous, not only due to better inventory management but primarily because the number of vendors involved. Problem is there are no published sales figures for Android vendors... wonder why. Back of the envelope exercise:, how many units of a specific vendor's shipments is to stuff the channel + demos, etc.? Pick a reasonable number. Then multiply that number by the number of Android vendors/models out there, and subtract from the Android shipment numbers. For Apple, of course, you only have to multiply by 1.

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  17. Please to read a comment that's not delirious.

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  18. It's funny how people who question data from top tier research firms (who actually follow scientific sampling methods) are the same people that quote data from ad networks (that use no sampling methods whatsoever).

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  19. This argument is really a pet peeve of mine and it stems from a flawed understanding of how supply chains work. Display shipments are only made when a manufacturer has unfulfilled orders for a product from a distributor/retailer. And a distributor/retailer would have no reason to order more of a product category that simply doesn't seem to be selling. This is why sequentially growing shipments are a very good leading indicator for sales. The only case where this doesn't work is where there is a sudden collapse in shipments - that signals that there is an inventory build-up somewhere in the supply chain, which is a direct outcome of sales being below forecasts. This is exactly what's happened to the 9.7" iPad.

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  20. Didn't we go through this same type of "sales collapse" rumor with the iPhone a couple of months ago?

    That proved to be false, as Apple later reported selling a record 28 Million iPhones in that quarter!

    These "analysts" (the only part of that word that applies to them is "anal") seem to be manipulating AAPL's price spreading these false, scaremonger rumors... and investors ignorantly eat it up without questioning the veracity of those rumors.

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  21. There's a pretty big difference between production cuts at one supplier and production cuts across all suppliers. NPD measures the latter.

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