IDC reported this week that the iPad accounted for 50.4 percent of worldwide tablert shipments in the third quarter of 2012, down more than 9 percent from the same period a year earlier. Apple has ceded ground to Samsung, which saw its share more than triple to 18.4 percent, as well as Amazon (9 percent) and Asus (8.6 percent).
Apple remains the dominant tablet vendor, of course, and it certainly wasn’t going to own the space indefinitely. But it has been particularly vulnerable on the low end of the market, where smaller gadgets sell for roughly $200 to $350. The company hopes to compete there with the new 7.9-inch iPad mini, which is getting positive reviews and appears to have sold well during its launch last weekend. But its unwillingness to bring such a gadget to market earlier – as I first urged two years ago – has been costly.
Consumerization “an unstoppable force” colliding with IT
Meanwhile, Gartner reported this week that the market for enterprise tablets is set to explode, with tablet purchases from businesses expected to soar from 13 million this year to 53 million in 2016. “The consumerization trend has hit IT as an unstoppable force,” the market research firm said in a prepared statement. And Microsoft is well positioned to tap that market with Windows 8 tablets and “ultramobiles,” Gartner said, which will claim 39 percent of the business tablet market in 2016.
Those “ultramobiles” will take a variety of forms, but a large market clearly exists for tablets that are more functional for business purposes than the iPad or other traditional tablets. It’s true that iPads are already being embraced by some businesses in a big way, but while those tablets may be ideal for pilots, salespeople and healthcare workers, they’re usually inferior to laptops when it comes to common tasks like creating spreadsheets or preparing a slide deck.
Microsoft is clearly aiming at the emerging market for business tablets with its Surface RT, which not only runs a version of Windows but also includes (for a price) an integrated keyboard that doubles as a cover. But as I wrote a few weeks ago, the venerable software developer faces some major challenges in that space: Microsoft forbids the use of the version of Office that comes with every Windows RT tablet for businesses who don’t have an additional license for other Office properties. Microsoft may opt to turn a blind eye to business users who don’t comply, but those policies are certain to limit its ability to market Windows RT tablets. And while many of the coming Windows 8 tablets may have superior functionality, they will likely be substantially pricier than the $500 price point Apple has set for mid-range tablets.
Taking a page from Microsoft’s playbook
So I think Apple would be wise here to take a page from the Surface RT’s playbook and develop a tablet that’s more business-friendly. That device should feature an integrated keyboard that is physically connected (rather than via Bluetooth), and that features a touchpad and slightly raised keys that mimic laptop keyboards (for fast and accurate typing). And while Microsoft has long been rumored to be developing versions of Office for iOS and Android, Apple could embed its own iWork suite on a business-targeted tablet or could strike a deal with a developer such as Quickoffice or DataViz to package Office-compatible software with an iPad.
Early success of the iPad mini notwithstanding, analysts and pundits are questioning whether Apple has lost its innovation mojo in the post-Steve Jobs era. A limited hardware portfolio has always been an Apple hallmark – and for good reason – but there’s a clear opportunity here for Apple to expand its tablet lineup with a business-centric device. Cupertino paid a price for being late to the low end of the tablet market; it shouldn’t make that same mistake when it comes to more expensive devices targeted at business users.