Since debuting last April, the iPad has utterly dominated the tablet market with a 95%+ marketshare. Recently, though, reports began suggesting that the iPad’s share of the increasingly competitive tablet market had shrunk to approximately 76%. At the root of this seemingly sudden drop were booming sales of the Samsung Galaxy Tab.
Or so we all thought.
This past January, Samsung announced that it had sold over 2 million Galaxy Tabs. That figure inevitably found its way into the calculations of analysts who found that the iPad’s marketshare was slipping.
But during Samsung’s earnings conference call last Friday, a Samsung executive clarified that the 2 million figure quoted to the press merely refers to units shipped to suppliers as opposed to the actual number of devices sold to consumers. Indeed, all Samsung executive Lee Young-hee was willing to say about the Galaxy Tab was that sales were “quite smooth”, though he refused to divulge precise sales figures.
Compounding the woeful state of the Galaxy Tab is that a significant percentage of users appear to be returning the device. According to data recently compiled by ITG Investment Research, December return rates for Samsung’s tablet checked in at 13% with that figure rising to 16% when the data encapsulated the holiday shopping season through January 15th. By way of contrast, the return rate for the iPad to Verizon is just 2%
During Apple’s own earnings conference call a few weeks ago, Apple COO and acting CEO Tim Cook didn’t appear concerned at all about the rising number of Android tablets.
Then you have the Android tablet, the variety that are out shipping today, the operating system wasn’t really designed for a tablet. And Google has said this, and so this is not just an Apple view by any means. And so you wind up having a size of a tablet that is less than what we believe is reasonable or even one that would provide what we feel is a real tablet experience. And so basically, you wind up with kind of a scaled-up smartphone, which is a bizarre product in our view.
And with the iPad 2 rumored for release in early April, Apple competitors will once again be trying to keep up with a previous generation Apple product.