DAILY NEWS Oct 26, 2012 7:00 AM - 0 comments

Small iPad adds to doubling of 7-inch tablet market

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2012-10-26

The arrival of the smaller iPad will turbocharge the market for 7-inch tablets, helping the market to approximately double in 2012 and 2013, according to IHS iSupply, El Segundo CA.

Global sales of tablets with displays in the 7-inch size range are expected to boom by about 100 percent this year to 34 million units, up from 17 million in 2011, as presented in the figure attached. Sales will nearly double again in 2013, rising 96 percent to 67 million.

“Just as Apple has dominated the market for 9.7-inch tablets with its iPad, iPad 2 and new iPad models, the company is poised to rule the market for 7.x-inch products, driving rapid growth of the segment in 2012 and 2013,” said Rhoda Alexander, director, tablet and monitor research for IHS. “The battle in the 7-inch space is highly spirited, with most of the other leading vendors already offering price-competitive products in this size range. IHS predicts Apple will successfully position the smaller iPad as a device that will be attractive and easy to adopt for both new and returning customers. This will spur rapid sales growth and provide tough competition for other companies contending in this size range.”

Smaller tablets gain bigger market share

The 7-inch size range, AKA 7.x inches, will account for 28 percent of all tablets in 2012, up from 24 percent in 2011. In 2013, the 7.x-inch share will rise to 33 percent.

IHS iSuppli regards its 2013 forecast for 7.x-inch tablet sales as conservative, with some factors potentially boosting the market to higher levels for the year.

“The major factor limiting shipments of the smaller iPad will not be demand, but a combination of production challenges and potential component supply issues,” Alexander said. “Reported production difficulties point to the likelihood that Apple is once again pushing design boundaries with the new product. Sources also indicate there have been some supply issues for parts used in the Apple Lightning connector and in the display. If Apple can resolve these issues rapidly, 2013 shipments and sales may exceed the current forecast dramatically.”

Apple’s capability to meet all demand and launch the product in all global regions promptly will be a major factor determining its near-term sales level.

“IHS expects the 7.x-inch product to be particularly popular in Asia, where interest in a smaller version of the iPad has been strong,” Alexander said. “If Apple has sufficient supply to meet demand in Asia following product launch, then the 2013 sales could be off the charts.”

Competitive response

Apple tablet competitors that are using the Android operating system until now have gravitated to the 7.x-inch size as a way to find a competitive niche compared to the bigger 9.7-inch iPad. With the anticipated arrival of the smaller iPad, these companies are increasingly looking at the 8.x-inch and larger categories as they seek to find new avenues of differentiation compared to Apple.

By contrast, new tablets based on Microsoft Corp.’s Windows RT and Windows 8 operating systems are likely to focus on products with 10-inch-and-larger displays, although there may be some offerings with displays as small as 8.x-inch.



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