Is Apple losing its edge to a cheaper, smarter tablet market?

Numbers show that while the tech giant still reigns in tablet shipments, it's growing at a slower rate than Samsung, Amazon, Asus, and Microsoft.

IDC Worldwide Tablet Tracker, May 1, 2013. IDC

At first glance, new numbers released by research firm IDC show that Apple has nothing to worry about regarding its control of the tablet market, but a closer look could raise some doubts.

While Apple is still the world's No. 1 tablet maker, Samsung is No. 2 and growing at a faster rate. Looking specifically at year-over-year growth from first quarter numbers, Apple grew by 65 percent -- not bad. But, Samsung grew by 282 percent, Asus grew by 350 percent, and Amazon grew by 157 percent.

The question is: Is this part and parcel of a bigger problem? Is the rest of the market getting smarter and better -- and also less expensive?

CNET spoke to IDC analyst Tom Mainelli about this question and also looked at why Apple's growth is slowing compared to the other top companies.

"One thing that I think is particularly notable about Apple is that they restarted the tablet market," Mainelli said. "Apple has been selling an awful lot of iPads in the U.S. since 2010."

In other words, the consumer market for iPads is getting a bit saturated. Not to mention, low-end tablets are popping up all over the place.

"Apple's share is decreasing and they're ceding share to companies willing to sell tablets for $199, $99, or $79," Mainelli said. "It was a major concession for them to go down to $329 for the iPad mini."

But, Mainelli points out that Apple is still consuming a large part of the revenue because it sells its products for a higher price than other companies. However, what about those companies that are making products similar in quality to Apple and at a slightly cheaper price?

"Everyone in our top five is certainly a threat, especially Samsung," Mainelli said.

What Samsung does is make products on a massive scale, he said. It has smartphones and tablets in all different sizes.

"That's what they're good at; they make one of everything and see what the market likes."

Still, Mainelli says he doesn't think it's all doom and gloom for Apple. Not only did the company do astoundingly well with tablet shipments in the first quarter of 2013 -- despite its slowed growth -- but also, businesses, government agencies, and the education sector are buying iPads and iPad minis at a growing rate. In other words, while the consumer market may be saturated, these commercial markets still haven't gotten their fill.

"You'll see Apple's commercial shipments continue to grow," Mainelli said, "and there are still a lot more regions in the world to conquer."

 

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