Tablets are hot. Apple is dominating tablets.
There you go; two pithy statements that not only sum up the theme of this blog, but also the current state of the emerging tablet market. It’s no secret that the iPad has dominated worldwide tablet shipments for some time now, but I never grasped the degree of Apple’s dominance in tablet usage. A recent post by Greg Sterling of Marketing Land cites data from ad network Chitika showing that Apple owns a more than 90% share of all tablet-generated web traffic. Perhaps I shouldn’t be so surprised, considering Apple has sold more than 83 million tablets worldwide.¹
This is especially significant if you believe eMarketer’s prediction that by 2015 one-half of all US Internet users, or roughly 130 million people, will own a tablet.² In fact, in April of 2012, Gartner predicted that by the end of 2016 there will 665 million media tablets in use worldwide, 45% of which will be Apple devices. That would equate to just shy of 300 million (299.25 million to be exact) Apple tablets in use throughout the globe.³
I knew I should’ve invested in Apple back in the 80’s.
Considering that Apple’s current valuation is somewhere north of 500 billion, will it be the first company in history to hit the 1 trillion mark?
However, before you go out and swap out your stock portfolio for Apple, it is important to note that other tablet providers are catching up. Other tablets, including the Samsung Galaxy, Microsoft Surface, and Google Nexus 7 are making inroads. Gartner predicts that by 2016, worldwide sales of Android tablets will have almost matched those of iOS:
A big reason for Apple’s tablet dominance lies in the proliferation of iOS apps. On its Q3 earnings call, Apple announced that there are over 650,000 apps in its App Store, up from 600K in April of this 2012. Approximately 250,000 of those apps were developed specifically for iPad.⁴
In the same call, Apple announced that it paid out 5.5 billion to app developers – a significantly higher sum than the 4 billion it had shelled out in the 2nd quarter of 2012.⁴
These numbers give us a glimpse into Apple’s very intelligent business model. Because tablets are mostly used to consume content, apps and tablets go hand in hand. Apple pays app developers handsomely, and they keep developing their best stuff in iOS. This fact is not lost on tablet consumers, who are thus far willing to shell out a premium cost for a premium product.
Traditionally a weak spot, Apple is even finding success the business market. Last year, 86% of the Fortune 500 were testing the Apple iPad or had employees using it for work. By April of this year, that number had jumped to 94%. A big reason for the iPad’s increasing popularity in this sector is the proliferation of business apps for iOS tablets.⁵
Once again, if you build it, they will come.
There’s one more big reason to be sanguine about the future of Apple. Facebook is deeply integrated into its new iOS6 operating system; further, iOS 6 will be supported on the iPad 2 and the new iPad 3.
Meanwhile, Facebook just rolled out its App Center to every country on Earth where Facebook is used. Considering that 81% of Facebook’s 950+ million active users are outside of the US and Canada, this is good news for Apple, especially since most Facebook users access the social network via mobile devices.
What’s the takeaway, you ask? First, you have my blessing to run out and buy an iPad for business or personal use. Second, the next time you’re at a cocktail party and someone asks for your thoughts on the emerging tablet market, remember to wow them with the following Hemingway-esque mantra:
“Tablets are hot. Apple is dominating tablets.”
¹ Marketing Land, “Report: iPad Still Dominates Web Traffic But Nexus 7, Nook On The Move”
² emarketer, “One in five Americans will use a tablet by the end of 2012”
Graphic courtesy of Gartner via Tech Crunch