Even Within Tablets Small Cheap Tablets Win

According to Canalys, 31% of personal computer shipments in Q2 of 2013 were tablets and Android/Linux was on 53% of those tablets.
“Canalys estimates that 68% of tablets shipped in Q2 had a screen size smaller than 9". ‘Consumers have been evaluating tablets and the results are now in,’ said Tim Coulling, Canalys Senior Analyst. ‘With touch-screens contributing to a high proportion of the build cost of a tablet, small-screen products can be priced very aggressively.’”

see Small tablets drive big share gains for Android.

That’s consistent with Walmart’s Best-sellers list where the number one best-selling tablet is a $69 7-incher.
WM_best-selling_tablet_2013-08-02
There’s no way Wintel can compete on price/performance on what’s selling to consumers. M$ is rapidly becoming a business-services company and leaving consumers to FLOSS. That’s only a temporary strategy. Consumers are employees and they will want to use at work what they use at home, or so M$ told us

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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17 Responses to Even Within Tablets Small Cheap Tablets Win

  1. bw cited two articles, the first, “By Rene Ritchie, Monday, Aug 6, 2012 a 7:47 am” and the second, “Samsung and Apple are the only companies with positive share. Apple has 53% of industry profits, and Samsung has 50%. Apple, however, had 71% last year. Samsung was at 37%. “ and both were about smartphones, not tablets. Come, join us in the future, bw.

    For the present state of smartphones, see
    Samsung Becomes World’s Most Profitable Handset Vendor in Q2 2013

    For the present state of tablets, see 10-Q for Q2 2013. Net sales of iPad were $6.374 billion. Clearly, Apple is feeling competition: “The year-over-year decrease in net sales of iPad during the third quarter of 2013 compared to the same period in 2012 reflects the reduction in average selling price in all of the Company’s operating segments and lower iPad unit sales in all of the Company’s operating segments except Japan.” IDC reported last year that Apple was losing share rapidly to Samsung. They are about due to issue another report on the current state. That should show Samsung well ahead. iPad sales dropped several million units in Q2 2013, down 14%. That’s why they are dropping prices. What the share of profits are, I don’t know but they should be comparable as iPad costs more to build.

    Whatever the present state, Apple is on the defensive: “Android will hit one billion number of subscribers on Android platform anytime today…”.

  2. oiaohm says:

    bw define of acceptable profit is the problem. Foxcom is doing a good trade out of no brand devices.

    This is the problem apple does not own there own production lines. Even everything with the samsung brand on it does not come from samsung production lines.

    bw this is the problem just because Apple and Samsung are up near the top when you do really follow the money lot of hardware makers behind the the devices are doing very well.

    The problem is while you are a blind moron bw not truly following the money you have no idea what is going on.

    Yes samsung is reporting a profit also note foxcom and other hardware makers have also reported record incomes from Android.

    There are many parties that could dominate android in future.

    bw why Samsung is ahead at the moment Samsung has done some of the best Android interface extensions.

  3. bw says:

    bw, citing no facts

    Pogson, continuing to struggle to move the discussion to firmer ground, ignores the “facts” cited previously, i.e.:

    http://www.imore.com/73-quarterly-smartphone-and-tablet-revenue-belonged-apple

    and

    http://www.businessinsider.com/smartphone-industry-profit-share-2013-7

    The only premise I made here is that only the two major suppliers of smart phones and tablet, to wit Apple and Samsung, are making any sort of acceptable profit and these two brands are the only ones likely to survive in the long run. The cheapo, no-name devices are not going to provide a satisfactory existence for their promoters and will forever languish in the market place.

  4. dougman says:

    “Whatever it is that you are on about is off that topic and non-responsive.”

    LOL…..best response from and right back to a troll.

  5. oiaohm says:

    This is the problem we are looking at a formation of a mirror system. At some point for the mobile chip makers to expand the server room and the pc space will have to be targeted.

    Problem is none of the mobile space fabs can get licenses to make x86 chips.

    Welcome to chaos. The tight rule of x86 is ending.

  6. bw, citing no facts, wrote, “Reports are that he is simply premature and has not yet seen the massive exit from these businesses by the companies that have failed to effectively launch their products”.

    • Samsung: “Samsung Electronics said its Galaxy S3 and Note 2 helped it to defy a shrinking smartphone market in the first quarter, boosting its overall profits by 42 percent from a year ago.”
    • HTC is less glorious, but, “Despite these falling profits, the company is still in the black, and certain industry commentators have been bullish about the latest reports. The Financial Times reported the news as “New flagship phone lifts struggling HTC”, whilst Engadget noted that at least the profits were an improvement upon the first quarter of 2013.”
    • Amazon and Barnes and Noble are not trying to make a ton of money on the sales but using them as terminals for customers of other products. Still they are about breaking even on the gadgets.
    • HP, Lenovo and the rest are diversifying to tablets to retain market share and the small guys are making money by keeping costs at rock-bottom.

    It’s the people making tablets for “8” that are actually losing money. Heck, even M$ which doesn’t have to charge itself a licensing fee for the OS didn’t make money.

  7. oiaohm says:

    “If it weren’t for oiaohm, you would be seen as the most confused person here. He has a mental illness, so maybe that disqualifies him from the competition, making you still the champion. ”
    Sorry bw you are a moron person who calls you what you are has to be mentally ill.

    “The issue under discussion here, before you stumbled in, was about the viability of the cheapo tablet makers (and more specifically the other Android device makers besides Samsung). Pogson’s cite touched on the effect the price competition has had on companies in the supply chain for these devices. My comment was that the only two suppliers making profits sufficient to sustain their continued participation in this business were Apple and Samsung.”

    Answer is white box PC’s in the x86 market have not disappeared. Straight way how cheap Android devices will remain is explained. Forces behind the whitebox market is the same as behind the android lower end.

    This is the problem cheap entry devices will never disappear. Companies have factories that make chips they need devices to sell them in. Without selling chips there fabs will die.

    Yes gigabyte asus and lot of other motherboard makers in the PC world make more selling parts than full machines. Then the chip makers behind them make profit as well.

    There is a tree that exists. This tree grows many branches. Fab factories is the root if the tree. Even samsung sells processor chips to some of there competition android devices.

    Samsung might be the new Intel. Yes Intel does make full PC’s and Servers and sells parts to the white box market.

    bw understanding how the PC market has existed completely explains what is forming in the Android market.

    bw does a white box maker have to find as much development money as intel the answer is no. A android device using a samsung chip does not have to find as much money as samsung either.

    Then think about competitor chips like allwinner(these line up to AMD and VIA cpu in the PC market). You might have like 1000 000 different android makers using these chips. All that money funnels back to that chip maker.

    This is where everything in Android gets twisted compared to Windows. The funneling back is done on the hardware side not software licening. This is where bw has the problem.

    You have to break down android devices by CPU type to find the upstream. Just like the whiteboxes. If you look at each PC whitebox maker in isolation not one could live. You have to look where the money is fending from the whitebox maker to see there odds of life.

    Cheap android devices are many times more complex model than most dream. Same with the whitebox pc market.

  8. bw says:

    Besides, look at Google, which isn’t making a lot of money from Android. Its stock is doing fine. Same with Amazon. Compared to Apple, it makes almost no money, but the stock is doing well

    If it weren’t for oiaohm, you would be seen as the most confused person here. He has a mental illness, so maybe that disqualifies him from the competition, making you still the champion. Google makes their money from selling ads on their search site. Microsoft makes their money from selling software programs. Apple makes their money by selling personal electronic devices.

    The issue under discussion here, before you stumbled in, was about the viability of the cheapo tablet makers (and more specifically the other Android device makers besides Samsung). Pogson’s cite touched on the effect the price competition has had on companies in the supply chain for these devices. My comment was that the only two suppliers making profits sufficient to sustain their continued participation in this business were Apple and Samsung.

    Pogson demurred, asserting that he could assume there were substantial profits, else they would leave the business. Reports are that he is simply premature and has not yet seen the massive exit from these businesses by the companies that have failed to effectively launch their products and that they will, indeed, follow his expectations.

    Whatever it is that you are on about is off that topic and non-responsive. Please take some of that money you have hoarded and give it to those educators that you despise before you totally lose touch with reality.

  9. dougman says:

    Profits over market share, hmmmmmm……

    So, in your opinion, Apple is winning the smartphone war because Apple makes the most money per point of market share. But is that really the best way to measure Apple’s success? Is that really the best way to measure winning? I would argue that it’s not.

    Reasoning:

    “My self-identity does not revolve around being a businessman, though I recognize that is what I do. I think of myself as someone who builds neat things. I like building neat things. I like making tools that are useful to people.” – Steve Jobs

    “I think the world’s a better place because Bill realized that his goal isn’t to be the richest guy in the cemetery, right? That’s a good thing and so he’s doing a lot of good with the money that he made.” – Bill Gates

    Based on these quotes, the goal for Apple shouldn’t be to be the company with the most money in the bank. It should be to make the best products in the world, and get them in as many hands as possible.

    So, what would be better for Apple, and for the world? To continue padding its bank account, or to try to lower the price of the iPhone, cut deals with more carriers, and truly attack Android?

    If you like Apple and its products, it seems like a no-brainer. You should want Apple to go for market share.

    But won’t Apple’s stock get crushed? Have you seen it lately? It’s been crushed.

    But won’t Apple cease to be the world’s most valuable company? Perhaps, but to echo Jobs, that’s not the goal. The goal is to make great products. And what good are great products in the hands of just a relatively few people?

    Besides, look at Google, which isn’t making a lot of money from Android. Its stock is doing fine. Same with Amazon. Compared to Apple, it makes almost no money, but the stock is doing well.

    Apple’s philosophy has always been to be consumer-centric. It wants to make easy-to-use, broadly-accessible products.

    But on some level, it’s failing consumers when only 15% of the global smartphone population has an iPhone.

    What all convey’s is that Apple over-charges for their stuff (so does the DOJ mind you), and should be lowering prices to counter the competition, as in the long-term, Apple will not be able to sustain their current revenue stream. They have no Steve Jobs replacement.

    In other Apple related news, the DOJ has finally made a decision on the price fixing scam Apple was running.

    http://www.justice.gov/opa/pr/2013/August/13-at-877.html

    Apple in turn, whined about it.

    http://gigaom.com/2013/08/02/apple-slams-governments-proposed-remedies-in-ebook-pricing-case/

    See, profits are not everything.

  10. oiaohm says:

    bw really you learnt nothing from history. Apple pulled in more revenue than Microsoft machine makers in the PC game as well. Heck a PC today vs a Apple machine. Apple pulled in more revenue.

    HTC and LG can hold out for a very long time. Reason they are not bearing the cost of OS development alone. Samsung is picking up part of there OS development costs.

    Nokia has Microsoft footing large percentage of OS bill.

    So what one is in big trouble is blackberry.

    Apple could end up stuffed due to patents so money might not be a issue. USA ruling over frand patents will allow motorola to go after Microsoft and Apple. Both have refused to pay for frand patents to Motorola.

    Did you not read the note. Android is outselling the iphone 2 to 1. So for every iphone sold there is 2 android phone sold.

    For apple I would be happy with this but a little worried. This sales pattern is threating a 1/3 2/3 physical device market share. That is still fine that is still enough market share to have people built applications for you platform.

    95% one OS physicial device market and Application makers stop making applications for you.

    bw tell me what is the point of Apple making all this profit long term if the result is there physical device market share gets too small for third party application makers to be bothered about.

    Yes revenue numbers tells you Apples current bottom line. Does not tell you Apples future. How apple is going in physical devices in use that define the size of the market to sell applications to defines Apple future.

  11. bw says:

    There’s a more recent report for phone profits:

    http://www.businessinsider.com/smartphone-industry-profit-share-2013-7

    Here’s the previous one that has been posted here a couple of time and you ignore since it doesn’t apparently fit what you want to be fact.

  12. bw wrote, without evidence, that “Apple is taking virtually all of the profits in the tablet arena and way more than half the profits in the smart phone market.”

    People don’t make and sell hundreds of millions of gadgets for no profit. Businesses are not charities.

  13. dougman says:

    Cough-Cough… Windows is sinking and people are jumping ship!

    “Sales of devices based on Apple’s OS X and iOS will nearly overtake those of products running all flavors of Windows — Windows 8, Windows RT, and Windows Phone — in 2015, a Gartner analyst predicts.”

    However, Android will do even better, outselling the Apple and Microsoft operating systems combined and it will do so this year.

    “The shift in OS dominance mirrors the changing computer landscape, where desktops and laptops are increasingly being replaced by smartphones and tablets. Microsoft has struggled to gain mass adoption for Windows Phone 8, and the dueling Windows 8 and Windows RT have confused some tablet buyers, leading to poor wales of both.

    Beyond Apple coming close to supplanting Microsoft in 2014, or actually surpassing Microsoft in 2015, there’s no question an equally symbolic landmark will be passed this year when sales of devices based on Google’s Android operating system beat the combined sales of Apple and Microsoft products. Android is already the Number 1 computing platform on new devices, with more than 500 million devices shipped to stores in 2012, versus 559 million for Apple (OS X and iOS) and Windows (PC, tablet, and smartphone versions) combined. This year, Android is expected to ship on 867 million devices, while the combined total of Apple and Windows products will hit 636 million, according to Gartner.

    The surge in Android and Apple comes as a result of the popularity of smartphones and tablets. Gartner expects tablet shipments to jump from 120 million last year to 202 million this year and 276 million in 2014. Smartphone shipments over the same period are expected to rise from 1.7 billion to 1.9 billion.

    Meanwhile, sales of PCs will continue to fall over the next two years as tablets and new ultra-mobile computers attract both home buyers and enterprise customers. Gartner said it expects sales of desktop and notebook PCs to fall almost 11 percent this year and 5 percent next year, largely due to weakening sales of laptops. Ultramobile computers, which are thinner and lighter than traditional notebooks, often have a touchscreen and often can be transformed into a tablet, will find favor with enterprise users”

  14. bw says:

    A deeper question is “Share of what?” Apple is taking virtually all of the profits in the tablet arena and way more than half the profits in the smart phone market. There are a number of no-name tablets beating one another up on price in the Android tablet game and how many of these makers are going to bother with it in a year or two with no profits?

    As your cite notes:

    “The move to smaller tablets has sparked a price war that has real consequences for the entire supply chain. These products generate little absolute margin for channel partners, vendors or component manufacturers. Content, applications and accessories (especially cases and keyboards) are now even more important to boost margins – areas where Apple remains a leader”

  15. dougman says:

    BYOD (Smartphones, Tablets, Chromebooks and Kindle Readers)

    Life sans M$ is good. 🙂

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