Can Samsung Upstage the iPad?

A change of the guard is currently taking place. It didn’t take long for Apple to become king of the smartphone market. After all, it did invent the modern smartphone. After overtaking BlackBerry, Apple continued to grow. Even with competition from multiple Android devices, it held its dominance.

Then along came Samsung, upending the entire model. Its Galaxy series has proved hugely popular with consumers. The latest model, the Galaxy S3, truly tipped the scales. Samsung hasn’t quite caught Apple yet, but unless Apple comes up with something drastic if could fall below Samsung by the end of 2013. It’s easy to see the writing on the wall.

A recent comScore report lays out the numbers. It might appear that Apple recovered in the last quarter of 2012, but the numbers aren’t exactly representative. It gained 3.5 percent smartphone market share, but that was on the strength of the iPhone 5. Samsung grew 1.9 percent even though the S3 was several months old, and consumers knew a new one was coming.

Samsung recently announced the Galaxy S4, and while it doesn’t break much new ground it garnered accolades from the tech press. Combined with Samsung’s strong marketing arm, it will lead to many sales. If we look at the comScore report come August, when the heaviest S4 sales will have taken place and before the new iPhone launch, we could see Samsung atop the market.

One question remains: can Samsung pull the same feat with tablets? It seems like an impossible task. After all, Apple made the iPad work when market experts said consumers wouldn’t warm up to the tablet form factor. How can anyone unseat the company that told the market what it wanted?

Apple’s Sheer Dominance

How greatly does Apple dominate the market? According to the latest IDC report, Apple has accounted for 43.6 percent of tablet shipments in the fourth quarter. This is nearly three years following the initial iPad. For comparison, the iPhone accounted for just 25 percent of smartphone subscribers in 2010, three years after the iPhone release.

(Of course, there were already players in the smartphone game when Apple entered; as mentioned, it created the tablet market from whole cloth.)

Apple also experienced relatively torrid growth in 2012, a year in which it released three different iPad models. Fourth quarter shipments were up nearly 50 percent, to 22.9 million units out of a total 52.5 million shipped by all tablet manufacturers.

This is no smartphone market, which Apple merely revolutionized. This is a brand new market, which Apple pioneered. How can any company beat out Apple in a market it invented?

Samsung Moving

If any company can pull off the feat, it’s Samsung. In fact, Samsung has been making a go of the tablet market earlier than any Android manufacturer. It started in late 2010 with the original Galaxy Tab, which was an unmitigated flop. It tried many more models in the coming years, including the Galaxy Tab 10.1, but it never made any traction. This was for two main reasons:

1. Android 2.3 was not suited at all for the tablet form factor. Even Honeycomb 3.0, designed specifically for tablets, made little headway. It wasn’t until 4.0 Ice Cream Sandwich that Google bridged the OS for smartphones and tablets, finally creating a viable experience.

2. While their tablets clearly weren’t as attractive as Apple’s, they still tried to compete on price. Given the choice between a $500 iPad and a $500 Galaxy Tab, consumers faced perhaps the easiest choice in electronics. By most indications, the early Android tablet market was limited to anti-Apple consumers.

In 2012, Samsung did make a move in tablets. One of the most vocal complaints about the iPad is its heavy weight. Samsung responded to that last year by creating a line of light tablets, ostensibly horning in and differentiating themselves in the market. From the numbers, it seemingly worked.

No, Samsung didn’t make a significant dent in the market, but it did increase its fourth quarter shipments by a whopping 263 percent, going from 2.2 million in 2011 to 7.9 million in 2012. That still leaves them with just 15.1 percent market share to Apple’s 43.6 percent, but that’s better than the 7.3 percent to 51.7 percent it face in 2011.

Expanding Market

Given Samsung’s growth, combined with the always improving nature of the Android OS, it might seem as though Samsung is poised at a run. It’s hard to ignore a triple-digit growth factor. Yet that number can be misleading. After all, ASUS grew 402.3 percent from 2011 to 2012. Are we to believe that they, too, will make a run at Apple’s dominance.

The overall tablet market grew 75.3 percent in 2012, going from 29.9 shipments in Q4 2011 to 52.5 in Q4 2012. It is natural, then, that smaller players will benefit from this trend. As more people buy tablets, there is a greater chance that they will choose the alternatives to Apple. As they say, a rising tide lifts all boats. (Except Barnes & Noble, which saw its Nook line of tablets decline 27.7 percent from 2011 to 2012.)

While Apple didn’t keep pace with competitors in terms of rate, it more than kept up in terms of sheer volume. They shipped 7.4 million more units in Q4 2012 than in Q4 2012, which is about equal to Samsung’s total shipments in Q4 2012. The rates might look pretty, but Samsung is a far, far cry from Apple at this point.

Still Apple’s Game

Apple invented the game, and they will continue to dominate it for years to come. They just have too much of a competitive advantage at this point. No single manufacturer comes close to them, and it will take a serious, serious sea change for any of them to pull in closer. That includes veritable titan Samsung.

What can we make, then, of articles that claim Android will ship more tablets than Apple in 2013? Remember that Android is an operating system. Many manufacturers, from reputable ones like Samsung to less than known ones like Coby, create Android tablets. There are many super low-end Android tablets that people buy, because they cost under $100. That’s not even in Apple’s market.

Further, just because more Android tablets ship doesn’t mean any one manufacturer will dominate. Look at those market share numbers again. The category “others,” which includes all non-listed manufacturers, composes 22.1 percent of the market. Yet we would never compare that to Apple’s market. So while Android shipments might out number Apple’s in 2013, it is highly unlikely that Samsung makes a significant dent in the market.

This is to say: market creation bears significant fruits. Apple created the tablet market, and it will continue dominating. Samsung might have caught Apple in smartphones, but it has a long battle ahead of it with tablets. It seems unlikely that Samsung will ever overtake the iPad.