ABI: iPad tablet share falls to record low after Android's Q3 surge

Although Apple's (NASDAQ:AAPL) iPad continues to dominate worldwide tablet market share, ABI Research reports that tablets running Google's (NASDAQ:GOOG) Android dramatically narrowed the gap during the third quarter of 2012, cutting the iPad's lead to its slimmest margin to date.

The iPad represented 55 percent of tablet unit shipments during the third quarter, a 14 percent decline compared to the previous quarter and the device's lowest market share total since its 2010 launch. Android now powers more than 44 percent of tablet shipments, led by manufacturers including Amazon (NASDAQ:AMZN) and Samsung Electronics. "As the OS of choice for the majority of device OEMs, we expect the Android ecosystem to continue growing in numbers--new manufacturers, better device choices for reaching more markets, and more developers finding value from apps and content," said ABI Senior Practice Director Jeff Orr.

ABI also believes that Apple's new 7.9-inch iPad mini will not steal market share from Android but will instead prompt consumer demand for standard iPad models to shift down-market. "With the introduction of a smaller, lower-cost iPad mini, Apple has acknowledged Android's beachhead of 7-inch-class tablets, though at the same time, it has failed to deliver a knock-out punch through innovation, pricing and availability during the most critical selling period of the year," Orr said.

The ABI report bolsters analyst Sameer Singh's recent forecast that Android's tablet market share growth is on pace to overtake the iPad in either the second or third quarter of 2013. Singh, an analyst with mergers and acquisitions consulting firm Finvista Advisors, notes that shipments of Android tablets have outpaced the iPad's sequential growth in six of the last eight quarters, thanks in part to the late 2011 introduction of Amazon's Kindle Fire.

"OEMs have learned from Amazon's model that diversified price points would help expand the market and take share from the iPad," Singh wrote earlier this month. "This has resulted in far more broad-based growth, which is not only sustainable, but should result in an accelerated ramp-up of sales over the next 3-4 quarters. Q1 2013 is likely to see a cyclical dip in shipments, but we are unlikely to see a crash. The growth pattern across OEMs is very similar to the dynamics in the early stages of the smartphone market, which suggests that tablets are finally being adopted by mainstream users."

Singh also agrees with ABI that iPad mini sales will not cannibalize the Android tablet market. "Early indications support my reasoning, as Kindle Fire HD sales spiked when the iPad Mini was launched, while Nexus 7 sales continue to remain strong," Singh stated. "The iPad would have to consistently outpace the growth of Android tablets over the next year to hold on to its market leadership position, which is quite unlikely… However, both platforms should see rapidly rising volumes, as market share gains will be growth-driven."

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