iPad lost 40% in Asian markets due to cheaper alternatives

Apple has lost more than 40% of its share of the Chinese tablet market over the past year to cheaper rivals led by Samsung Electronics, as devices based on Google’s Android and other operating systems rapidly overtake the US company’s gadgets. In the second quarter, Apple shipped 1.48 million iPads in China, 28% of the tablets shipped in that market, according to research firm IDC. Samsung shipped 571,000, or 11% of the total.

The numbers show that Apple is losing market share worldwide as competitors boost their performance creating similar devices on a lower price. Despite the drop of iPad shipments of 14.1% year-on-year in the June quarter, shipments in China continued to grow but not as fast as competitors’, rising 28% compared with the same period last year, IDC said.

“Most . . . Android players are growing with strong price advantage,” said for Financial Times IDC analyst Dickie Chang. “Samsung, Lenovo, Asus, and Acer are providing more competitive products with [countrywide reach]. Meanwhile, consumers are familiar with Android OS from smartphone use.”

Main reason in the rise of Android tablets has been the falling price of components. That has enabled lower-cost Chinese brands to make significant presence in the tablet market. The average per-piece price of the touch panels used in 7-inch tablets fell 7.5% to $15.60 between the fourth quarter of last year and the first quarter of this year, according to supply chain analysts at IHS. Chipmaker MediaTek, an important supplier to low-cost Chinese smartphone makers, has been focusing on new chips designed for tablets.

Several analyst predict higher sales of iPad devices after the new version comes out on the market which probably would lead to depreciation in price of the older model, thus making it affordable for many.

Apple could turn things round later this year when the new iPad launches in China, said Mr Chang. “Meanwhile, if Apple cut the price of previous generation [products] . . . more consumers would love to buy the Apple iPad.”