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Analysts Predict Apple Will Dominate Tablet Market with iPad 2 to Capture 80% Market Share



In the launch keynote of the iPad 2, a confident Steve Jobs took to the stage to declare that 2010 was the year of the iPad and that 2011 will be the year of the copycat, pointing out rivals like Motorola, RIM, and Samsung among those who are launching tablets. How much of Jobs’ statement is accurate and how much of it is just gloat? Well, according to analysts, Jobs pretty much nailed the tablet market with the iPad and also nailed the tablet predictions in declaring the iPad 2 the best tablet to hit that will leave competitors “flummoxed,” according to the Apple CEO.

The iPad in 2010
IDC Research released figures about the tablet market in 2010, affirming Jobs’ confident figures for the iPad sales number, in which the Apple CEO says that the iPad created a $10 billion tablet industry for Apple in the 9 months it was on store shelves in 2010. IDC says that the iPad started off strong capturing 93% of the market in the third quarter, but slowed to about 73% in the fourth quarter, which was primarily the cause of Samsung’s Galaxy Tab. Though the Tab hasn’t really gained much traction, it–along with rival tablets like the Android-powered Barnes & Noble e-reader tablet–did leave a dent. However, Apple still walked away with over 80% of the tablet market in 2010.

IDC expects Apple to continue to own 70-80% of the tablet market moving forward, despite increasing threat from Android. The research shows that the Motorola Xoom, which runs on Android 3.0 Honeycomb, failed to gain much traction due to high prices as a barrier to entry.

The iPad 2 in 2011
The iPad 2 is scheduled to go on sale at 5 PM today, and Apple is set to sell 600,000 units this launch weekend, which includes a WiFi model, a 3G GSM model for AT&T in the U.S., and a CDMA model for Verizon Wireless. Each model will come in three configurations–16, 32, or 64 GB of internal flash memory. Apple’s also expanding its retail channels with the iPad 2 and making a white model available alongside a black model. The 600,000 units expected to sell would be double what Apple did a year ago. Various analysts expect weekend launch sales to hover around or above 500,000 units.

AppleInsider reports that Piper Jaffrey analyst Gene Munster expects Apple to beat its quarterly sales figure from the first launch quarter. Last year, Apple managed to move 3.27 million iPad 1 and this year Munster predicts that Apple can sell 5.5 million iPad 2s in the first launch quarter of the tablet.

The numbers here are significant as early reviewsmine included from Apple’s launch event–show that the iPad 2 is only an evolutionary upgrade to the original tablet. However, in my view, those small upgrades add up to create a better user experience.

According to a research from ChangeWave, tablet demand is expected to increase this year and the iPad 2 will lead that demand. 27% of respondents to ChangeWave’s survey say they are looking to buy a tablet, up from 25% a year ago. According to that survey, 82% of respondents say they are looking to buy Apple’s iPad, compared with under 5% each for Motorola, Research in Motion, and Samsung. There is an 8% other category, which includes Android tablets from other makers, the HP TouchPad, and other slates. The survey notes that users may be holding off on buying a new laptop, netbook, e-reader, and other electronic devices and are considering a tablet instead, confirming speculations of the tablet cannibalization effects on netbooks and dedicated e-readers like the Amazon Kindle and the Barnes & Noble Nook.

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