Apple's Tablet Market Share Shrinking

A blog about business and economics.
Nov. 6 2012 10:02 AM

Tablet Market Looking More Like Smartphone Market Than MP3 Player Market

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One question hanging over Apple's finances has been whether the market for tablet computers would look more like the market for smartphones—where the iPhone is a profitable hit product but lower-margin Android devices lead in market share—or whether it would be more like the market for MP3 players, where iPod became an utterly dominant brand. That's basically a "good news vs better news" kind of question (which is how Apple got to have America's leading market capitalization), but the latest IDG numbers, charted above, make it look more like the smartphone world.

Basically Apple has a shrinking share of a growing market, which means growing sales and basically good news for the company. But not the kind of amazingly good news that the iPod precedent would have made.

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The fact that non-iPad tablets are catching on also strikes me as bad news for Microsoft. Farhad Manjoo reports today that the Surface RT tablet isn't as good as the iPad and yet like the iPad it's considerably more expensive than a Nexus 7 or a Kindle Fire. If the cheaper non-iPad tablets just sucked and nobody was buying them, then that might still be a sign that there's plenty of room for an Apple competitor and just nobody has figured it out yet. But it looks like at least three companies—Apple, Amazon, and Samsung—are making tablets that people enjoy, which means Microsoft is trying to edge into a fairly crowded space. 

Matthew Yglesias is the executive editor of Vox and author of The Rent Is Too Damn High.

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