Can Industry Players Duplicate Apple and Huawei Tablet Success?

Discussion in 'Press Releases and Announcements' started by Ed Hardy, Aug 4, 2017.

  1. Ed Hardy

    Ed Hardy FORMER Editor, TabletPCReview Staff Member

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    Apple stunned the tablet market with 15% growth while Huawei posted a 42% growth, according to Strategy Analytics

    The total tablet market fell 7%, raising questions of how other vendors can shrug off dreadful results


    Boston, MA - August 3, 2017 – After 13 straight quarters of year-on-year shipment declines, Apple posted a sensational increase in Q2 2017 of +15%. Meanwhile, Huawei has thrilled the industry for the last two years with sustained growth through a proven strategy of partnering with carriers and a good portfolio mix, tacking on another 42% growth this quarter. Still, the overall tablet market declined by 7% year-on-year in Q2 2017 as many vendors experienced difficulty in adjusting to new market trends and consumer demand. The new “Preliminary Global Tablet Shipments and Market Share: Q2 2017” report from Strategy Analytics’ Tablet & Touchscreen Strategies (TTS) service offers perspective on whether other industry players can duplicate this success or will they will continue an aggravating journey through the market.

    Exhibit 1: Q2 2017 Showed a Tremendous Tablet Market Share Shake-up
    IMG_0314.JPG

    The promise of greater market share and profitability exist for those vendors, operators, and retail/channel partners that can adapt to the long replacement cycles and the hasty exit of unbranded White Box vendors from the tablet market. The tablet market is still quite young compared to most other market segments and as tablets have matured, we have discovered that the replacement cycle is much closer to that of PCs than of smartphones, resulting in years of market decline after the industry peaked in 2014.

    Peter King, Director – Devices Practice added, “Customer demands for higher quality, stronger content integration, and lower prices have pushed unbranded White Box vendors to consolidate or exit the market as profit margins shrink to unsustainable levels.”

    Tablet Market Dynamics by Operating System
    • Apple iOS shipments (sell-in) came in above projections at an astounding 11.4 million iPads in Q2 2017, skyrocketing its worldwide market share to 26% of the Tablet market. Despite a large influx of lower-cost basic 9.7-inch iPads, ASPs held steady quarter-on-quarter at $435, though down 11% compared to the previous year when the iPad Pro 9.7 launched.
    • Android shipments fell to 26.4 million units worldwide in Q2 2017, down 13% from 30.3 million a year earlier and down 2% sequentially. Market share also fell year-on-year by 4 percentage points to 60% as the receding influence of White Box vendors takes a severe toll on the market and branded Android vendors have been unable to fully reclaim this lost volume.
    • Windows shipments fell 12% year-on-year at 6.0 million units in Q2 2017, from 6.8 million in Q2 2016. Shipments declined 4% sequentially. Even still, Windows market share stayed steady at 14% year-on-year as more Windows models are launched by traditional PC vendors and mobile-first vendors.
    Industry players missing out on strong tablet growth are strongly encouraged to consider the following questions:
    1. How can Western vendors improve market share in Asia Pacific? Likewise, how can Chinese vendors improve market share and profitability in North America? How can they win new customers by meeting different, market-specific expectations?
    2. Which actions should vendors take to improve share in the growing enterprise market?
    3. How can vendors replicate Huawei’s success in 3G/LTE tablets? Are there specific consumer acceptance issues which need to be addressed? Will new vendor/carrier partnerships improve prospects for connected tablets?
    Eric Smith, Senior Analyst of Tablet and Touchscreens concluded, “Strategies must change to unlock greater market growth and reach customers are hiding in plain view but are unimpressed with their current choices. By determining how competitors are positioned in the market, how to improve tablet portfolio/pricing, and which channels can improve market performance, industry players can be empowered to successfully approach the market and find the right customers.”

    About Strategy Analytics

    Strategy Analytics, Inc. provides the competitive edge with advisory services, consulting and actionable market intelligence for emerging technology, mobile and wireless, digital consumer and automotive electronics companies. With offices in North America, Europe and Asia, Strategy Analytics delivers insights for enterprise success. www.StrategyAnalytics.com

     
  2. Ed Hardy

    Ed Hardy FORMER Editor, TabletPCReview Staff Member

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    Market research firm IDC had its own comments on the top 5 tablet makers in Q2:

    Apple positioned itself quite well during the quarter by consolidating its lineup and introducing two new iPads. The new iPad's relatively low price point triggered some consumers to upgrade their aging devices and demand for this new tablet finally caused a turnaround for Apple's iPad business. Meanwhile Apple's transition towards detachable tablets continued with the launch of the 10.5" iPad Pro and a major update to iOS (expected later this year).

    Samsung was able to gain share simply by sustaining flat growth in this declining market. The company appears to be the third major contender in detachables, after Apple and Microsoft, and in typical Samsung fashion offers multiple detachable tablets with a choice of either Windows or Android. On a worldwide basis, Samsung's slates have a significant presence though, like many other vendors, this portion of the business continues to struggle.

    Huawei's investment in brand marketing in Europe and Asia has continued to work well as the company finds itself among the top 5 for tablets as well as smartphones. With plenty of low-cost and cellular-enabled options, Huawei has been able to slowly steal share from rivals like Lenovo. However, the company has been fairly cautious of the detachable market and recent products have had very limited launches.

    Amazon.com's aggressive pricing strategy has worked well due to its ever-growing ecosystem. Amazon also managed to update its lineup, offering new tablets at a better price and expanding its Alexa service to the UK. Amazon is also the only major vendor that actively targets the kids' tablet market by offering a dedicated bundle inclusive of kid-friendly content – an approach that seems to have paid off as the company has managed to maintain a stronghold in the tablet market.

    Despite the annual decline, Lenovo has managed to slowly increase the share of detachable tablets within its product portfolio, which tend to have a higher average selling prices (ASPs). A low-cost strategy focused on Asia has worked so far, but that strategy is starting to lose its legs.
     

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