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Thursday, January 31, 2013
Tablet Shipments Soar to Record Levels During Strong Holiday Quarter


Worldwide tablet shipments outpaced predictions reaching a record total of 52.5 million units worldwide in the fourth quarter of 2012 (4Q12), according to preliminary data from the International Data Corporation (IDC).

The tablet market grew 75.3% year over year in 4Q12 (up from 29.9 million units in 4Q11) and increased 74.3% from the previous quarter's total of 30.1 million units, the research firm said. Lower average selling prices (ASPs), a wide range of new product offerings, and increased holiday spending all acted as catalysts to push the already climbing tablet market to record levels.

"We expected a very strong fourth quarter, and the market didn't disappoint," said Tom Mainelli, research director, Tablets, at IDC. "New product launches from the category's top vendors, as well as new entrant Microsoft, led to a surge in consumer interest and very robust shipments totals during the holiday season. The record-breaking quarter stands in stark contrast to the PC market, which saw shipments decline during the quarter for the first time in more than five years."

Apple's iPad once again led the market, and the firm's shipped a total of 22.9 million units. A strong iPad mini launch, plus availability of the fourth generation full-sized iPad, led to solid 48.1% shipment growth over the same quarter last year. However, strong competition in the market led to Apple's market share declining for a second quarter in a row (down to 43.6% from 46.4% last quarter). Number two vendor Samsung experienced 263% year-on-year growth, shipping nearly 8 million combined Android and Windows 8 tablets during the quarter to grab 15.1% of the market, its same market share total from the previous quarter.

Amongst the other top 5 vendors, Amazon and Barnes & Noble both saw their market share increase sharply as new products gained traction during the holiday season. Amazon shipped more than 6 million tablets during the quarter, increasing its share to 11.5%, up from 8.3% the previous quarter, with year-over year growth of 26.8%; Barnes & Noble shipped close to a million units, increasing its share to 1.9%, up from 0.7%, despite a year-over-year growth rate of -27.7%. Meanwhile, number four Asus saw its share slip from 7.8% to 5.8% despite continued strong shipments of its Google-branded Nexus 7 tablet and the highest year-over-year increase in the top five at 402.5%. Microsoft entered the market during the quarter with its Surface with Windows RT tablet, but failed to reach the top five after shipping just shy of 900,000 units into the channel.

"There is no question that Microsoft is in this tablet race to compete for the long haul. However, devices based upon its new Windows 8 and Windows RT operating systems failed to gain much ground during their launch quarter, and reaction to the company's Surface with Windows RT tablet was muted at best," said Ryan Reith, program manager, Mobile Device Trackers at IDC. "We believe that Microsoft and its partners need to quickly adjust to the market realities of smaller screens and lower prices. In the long run, consumers may grow to believe that high-end computing tablets with desktop operating systems are worth a higher premium than other tablets, but until then ASPs on Windows 8 and Windows RT devices need to come down to drive higher volumes."

According to another market research firm, IHS iSuppli, shipments of the Surface RT device into the channel were about 1.25 million, but sales out of the channel were significantly lower, putting sales in the range of between roughly 680,000 and 750,000.

Analysts see little evidence of continued production of the Microsoft RT device in the first quarter because Microsoft is still trying to sell off inventory.


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