Tablets have continued to bleed the traditional PC market dry. The latest numbers from research firm Canalys revealed that tablets accounted for over a third of PC shipments in the fourth quarter of 2012. Worldwide PC shipments were found to have increased 12% year-over-year to 134 million units with 46.2 million units qualifying as tablets, a 75% year-over-year increase. Apple (AAPL) continued to lead the industry thanks to strong iPad sales, shipping 27 million units and taking a 20% share of the market for the first time. The iPad mini was a hit for the company and accounted for more than half of Apple’s total iPad shipments. Due to supply issues and cannibalization of the larger iPad, however, Apple’s tablet share dropped below 49% and for the first time the company did not control over half the tablet market.
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“Apple timed the launch of the iPad mini well,” said Pin-Chen Tang, a research analyst with Canalys. “Its success proves there is a clear demand for pads with smaller screens at a more affordable price. Without the launch, Apple would surely have lost more ground to its competitors.”
Samsung (005930) also experienced strong tablet sales and found itself in a top five position for the first time in overall PC sales, sitting only behind Apple, HP (HPQ), and Lenovo (LNVGY). The company’s Galaxy tablet shipped 7.6 million units, a year-over-year increase of 226%, and its notebook computers shipped 4.1 million units for a 9% share of the PC market.
Amazon (AMZN) was found to have increased its worldwide shipments by 18% to 4.6 million units due to an expanded Kindle Fire lineup and sales in additional markets. Google’s (GOOG) Nexus 7 and Nexus 10 tablet also “performed relatively well” and shipped a combined 2.6 millin units in the fourth quarter.
It has now become a requirement for Android vendors to target low price points if they are interested in increasing their shipments. The success of Amazon, Samsung, and Google has helped Android’s tablet market share increase to 46%.
“The sub-$200 price bands now feature products from established players that do not rely on low-quality components,” said Tom Evans, a Canalys analyst. “Those who control ecosystems, such as Amazon and Google, can obtain revenue from content sales, but pure hardware OEMs must accept decreasing margins or exit.”
The research firm found that shipments of Microsoft’s (MSFT) Surface RT tablet are off to a shaky start with shipments of only 720,000 units in Q4.
“The outlook for Windows RT appears bleak. Hardware OEMs are ignoring it due, in part, to a pricing strategy that does not align with the economics of the pad market,” said Tim Coulling, a Canalys senior analyst.
The analyst added that he expects Microsoft to “rethink its pricing strategy for RT in the coming weeks,” and said that the company should drop the price of the operating system by 60% to get “OEMs back onside.” He believes that Microsoft will have a better chance of turning Windows RT around if it increases manufacturer support, and figures out a strategy to educate consumers and attract new developers.
This article was originally published on BGR.com