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Report: Can anyone match Apple, Huawei tablet success?

August 4, 2017

After 13 straight quarters of year-on-year tablet shipment declines, Apple posted a huge increase in Q2 2017 of +15 per cent. 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 per cent growth this quarter. Still, the overall tablet market declined by 7 per cent year-on-year in Q2 2017 as many vendors experienced difficulty in adjusting to new market trends and consumer demand.

A 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.

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 per cent 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 per cent 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 per cent from 30.3 million a year earlier and down 2 per cent sequentially. Market share also fell year-on-year by 4 percentage points to 60 per cent 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 per cent year-on-year at 6.0 million units in Q2 2017, from 6.8 million in Q2 2016. Shipments declined 4 per cent sequentially. Even still, Windows market share stayed steady at 14 per cent 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.”

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