Android Tablets Swallow OZ iPad Sales - But For How Long?

Written by Alex Zaharov-Reutt      19/08/2014 | 09:53 | Category: PLATFORMS

Android tablets have outsold iPads in Australia by a tiny margin for the first time as consumers wait for new iPad models, but the trend should reverse in the second half of 2014.

Android Tablets Swallow OZ iPad Sales - But For How Long?
Longer upgrade cycles and the longevity of older iPads has created a lull in tablet sales during the first half of the year, according to analyst firm Telsyte. 

This is despite 1.8 million 'media tablets' selling during 2014's first half, 28pc down from the last six months of 2013, with Android marketshare beating Apple by a tiny margin, 47pc to 46pc, with Windows tablets in third place with 7pc of the market.  

The 28pc drop in sales isn't too surprising when you note that tablet sales have experienced three solid years of growth, including tablet upgrades and Christmas gift-giving, but the longevity of iPads and the lack of exciting new Android tablets in the first half of 2014 contributed to a lack of good reasons to upgrade, resulting in longer upgrade cycles and putting the market "in a lull" as consumers wait for new models. 

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Even so, Telsyte reports "the population penetration of media tablets increased to 46% or 10.8 million people at the end of June 2014", and says the iPad 2, released in March 2011, is an example of tablet longevity: it is still the most popular tablet in use during 2014.

That's despite the iPad 2's age, and in stark contrast to many older Android tablets that aren't getting new updates, Apple notes at the bottom of its iOS 8 page that the iPad 2 will receive the major free iOS 8 update. 
And while tablet sales have fallen, Telsyte MD Foad Fadaghi says Apple should be back in No.1 spot over the second half of 2014 (H2).  

He says that: "Apple should have a strong second half if it can bring upgraded models to market and benefit from a halo effect created by the iPhone 6 launch. 
"More than half of iPhone users already have an iPad, whether consumers upgrade both this year will be the question many will be asking."

Unsurprisingly, Telsyte points to its surveys pointing to "greater purchase intentions for iPads overall in H2, and higher repeat purchase intentions by existing iPad users than Android tablet users."

Low-end Android tablets flooding the market aren't helping either, with both iPads and premium Android tablets suffering from the effects. 

These low prices have obviously helped Android vs iPad tablet market share, but as Telsyte says, "Android only captured a third of the market in terms of dollar value."
The analyst firm forecasts 2.1 million tablets to be sold during H2 2014, which will be "influenced by a strong smartphone purchasing cycle expected to start in October", which is expected to generate 5.6 million smartphone sales in H2 2014. 

As has been widely speculated online, new smartphones "might delay delay purchases of new media tablets for many existing users until 2015 and beyond", but will it be because of larger smartphone screens?

Telsyte's research shows "the impact of phablets on the purchase intention of tablets in H2 is marginal, with only 5% less likely to be considering buying a new tablet in H2, if using a phablet currently, compared to standard smartphone users". 

However, this "might change following the impact of a larger screen iPhone 6."

Mr Fadaghi added that: "A tablet upgrade cycle might not commence until current devices become more readily obsolete, either in terms of computational capability, operating system, application interoperability, graphics or connectivity."

An potential driver of sales and upgrades is expected to be interoperability with new wearable devices or sensors, such as Apple's iTime/iWatch, or new versions of Google's Android Wear smart watches. 

But with smartphone demand expected to be nearly three times more than media tablets for the second half of 2014, the tablet market could remain more challenging than expected.