Apple Inc. (AAPL) saw its tablet market share fall significantly in the second quarter, according to recent reports. That plunge should have Apple stock investors worried, especially in advance of expected relaunches for the iPad Mini and full-sized Apple tablet later this year.
IDC said last week that Samsung (SSNLF) posted strong gains thanks to its Galaxy tablet, and that Apple’s market share slipped from over 60% in the year-ago quarter to under 33% in 2013.
Yes, the Apple iPad still dominates the tablet market with 32% of the 45 million units sold in the quarter, but that was down from 60% share in the year-earlier period, the research group said. Apple also sold only 15 million units, which was down 14% in volume from the year-earlier period.
Meanwhile, Samsung Galaxy tablet sales quadrupled to 8.1 million, or 18% of the total market. Samsung’s market share was up 8 percentage points from 10% in the year-earlier period.
And though homegrown Google tablet hardware isn’t a factor yet, its Android OS is running on 63% of the total tablet market, according to IDC.
Even Microsoft (MSFT), which wrote off $900 million on ugly Surface sales and bloated tablet inventory last quarter, saw improvement. Windows OS market share, spanning Surface tablets and those provided by PC makers like Hewlett-Packard (HPQ), now stands at 4%, up from just 1% a year ago.
Apple stock investors, take note.
A new Apple iPad launch would help reverse this slide in dominance, of course, if it has enough flash to win over consumers and prompt them to upgrade.
But investors should start to worry whether consumers buying competitors’ tablets in the interim will stick — and whether Apple has lost some iPad users forever.
Apple stock is heavily reliant on the dominance of its iPad, especially since the iPhone seems embroiled in a race to the bottom on pricing.
Erosion in both market share and margins in iPad sales could hurt Apple stock significantly.
- The Microsoft Surface can’t outdo the iPad. (The Slant)
- Apple rumors hint at big things to come. (The Slant)
- Will an iPad mini with Retina display launch in October? (InvestorPlace.com)
Jeff Reeves is the editor of InvestorPlace.com and the author of “The Frugal Investor’s Guide to Finding Great Stocks.” Write him at firstname.lastname@example.org or follow him on Twitter via @JeffReevesIP. As of this writing, he did not own a position in any of the stocks named here.