Why Apple still leads the tablet market despite market share loss

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Apple still leads the tablet market despite market share loss

In our previous articles in this series, we discussed the tablet market as a whole. We saw that although the tablet market has shown strong growth up to 2013, the forecast for 2014 is for slow growth. Here, we’ll discuss the individual players in the tablet market. According to Gartner, Apple (AAPL) still leads the tablet market by vendor, although its market share has declined from 52.8% in 2012 to 36% in 2013. This loss could be largely attributed to the rapid rise of Samsung (SSNLF) in this market, with market share increasing from 7.4% in 2012 to 19.1% in 2013. The other important players in this market are ASUS (AKCPF), Amazon (AMZN), and Lenovo (LNVGY).

Apple Revenue Split

The iPad is the second most valuable business for Apple

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For Apple, the iPhone is the most valuable business, from which it generates about 53% of revenues, while the iPad is the second most valuable business, from which it generates about 19% of Apple’s revenues. The success of the iPhone and iPad are even more important for Apple, as it helps generate a halo effect, through which users tend to buy other Apple products such as Mac, apps, and accessories. So for Apple, losing market share in the tablet market doesn’t bode well. However, the main point to note here is that Apple has never tried to cut the prices of its devices in order to gain market share. It has always maintained its premium brand name.

iPad’s web traffic is huge

Although Apple has lost share in the tablet market, a Chitika report suggests that 81% of web traffic usage on tablets in North America comes from iPads. Amazon and Samsung each have market share of less than 7%. This shows that although people are buying fewer iPads, they’re using them significantly more. This high web traffic helps Apple generate more revenue not only from application downloads, but also from higher mobile web advertising income.

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