Honeycomb sweet spot for Android
Optimised tablet platform to whip up business and consumer interest
If the incandescence at trade shows -- lit up with 7-10in LCDs -- over the last two months has not been a sign, the 7.33m iPads Apple says it sold in the preceding quarter should be. The tablet has finally arrived.
We believe that a stream of competitors are due to appear in the coming weeks and months. The tablet market will continue to grow at the expense of the ailing netbook category, plugging the gap between smartphones and notebooks that netbooks had for two years.
Shipments were down 23 per cent year-on-year in Q3 in the wake of the iPad launch. Then Q4 fell 27 per cent from 2009. Meanwhile, tablet sales through distribution surged 308 per cent between Q3 and Q4 2010.
Performance varied, though: Samsung's Galaxy Tab sales through the channel actually fell 82.6 per cent in unit terms in December when compared with its launch month, and January average selling prices declined 28 per cent in February 2011. Galaxy Tab volumes fell a further 58.3 per cent in January 2011.
Despite being based on a small sample, sales were by no means the runaway success widely reported.
Figures through the same Context panel showed UK iPad sales by unit through distribution were up 156.1 per cent by volume in the week following the Galaxy Tab's UK launch.
Toshiba's Folio fared little better, having been pulled off the shelves by DSG upon launch in October 2010 following large numbers of customer returns. Sales through distribution were in the hundreds, rather than the thousands. Conversely, Toshiba saw Spanish sales exceed 2,300 units in December 2010.
No doubt, both phenomena were linked largely to Android 2.2's clunky interface on those two tablets, and Honeycomb's arrival will do much to alleviate the poor sales - and high returns rate - of Android-based devices.
We have found that sales of tablets running Android have barely affected market share through distribution. Android tablets accounted for14 per cent of the market in November, followed by two months of sequential decline for the category's sales.
December saw Android tablet market share at 10 per cent in volume terms across Europe, and in January it only reached eight per cent.
This may seem considerably lower than other reported sales of Android tablets, but take note of whether the data is based on ‘sell in' (or ‘shipments') data, ‘sell-out' data (distributor to reseller/retailer) or direct sales.
Distributor ASPs, however, did reflect that Samsung is responding to the situation, with prices falling from £431.94 to £313.12 between in weeks four and five of 2011. Major retailers and e-tailers followed suit, with Amazon UK's Galaxy Tab prices dropping from £449.99 to £399.99 in the same week.
The ASP of iPads with equivalent specifications (16GB, 3G) stayed fairly constant, although the ASP for all iPads over the same period fell from £439.03 to £426.20.
There is also a much greater demand for tablets within businesses than was the case with netbooks. The tablet has been tipped to remain a secondary device, supplementing rather than cannibalising the notebook. Its limited specifications and capacitive touch-screen interface suggest that corporations will use it mainly for fieldwork, product and person management or client presentations rather than day-to-day tasks.
As others have written, this year we will see a final curtain call for the netbook, with business notebook sales largely unaffected. Notebook sales to consumers, where the social media-enabled, multimedia tablet devices meet the requirements of the casual mobile computer user, are likely to decline alongside them.
Salman Chaudhry is mobile computing product manager at Context