Apple’s anticipated iPad update comes as the tablet market is white-hot. In a new report published for Forrester clients today, we’ve revised our US consumer tablet forecast upward: We now expect 112.5 million US adults to own a tablet in 2016, which will equal 34.3% of US adults. In Europe, the numbers are similarly impressive, with an expected 105.7 million tablet users, or 30.4% of consumers 16 and older, in the EU-7 by 2016. With an assumed replacement rate of two years, cumulative unit sales will be much higher: In the US, we forecast that consumers will buy 292.5 million tablets from 2010 to 2016.
Tablets are a global phenomenon—we estimate that US consumers constitute only 43% of Apple’s 55 million iPads sold through the end of its last fiscal quarter, with the rest going to consumers and enterprises in the rest of the 90 countries where the iPad is now sold. Tablets are also a worker phenomenon: Although the No. 1 place where consumers use tablets is in the living room, 37% of US tablet owners take them to work as well. In a recent Forrester survey of 9,912 technology end users at SMBs and enterprises in 17 countries, we found that workers in BRIC countries (Brazil, Russia, India, China) and Mexico actually led demand for wanting to use a tablet for work—and being willing to share the cost of the device with their employers.
The big story we’ve been following since the iPad launched is the war of the platforms: How will Google and Microsoft take share from market-leading Apple, and how will Apple maintain its lead? In the US, we’ve seen half of the question answered. Google is stealthily gaining tablet platform share—but not through Motorola, Samsung, HTC, or its other mobile or PC OEM partners. No, Google is gaining, thanks to Amazon and Barnes & Noble, whose tablets use a version of Android branded with their own services, not Google’s. As we describe in our report, we believe that Amazon and B&N have actually expanded the addressable market for tablets in the US by launching their tablets at significantly lower price points than the iPad. In China, the iPad is popular in Tier 1 and Tier 2 cities, but Lenovo’s Android tablet and even cheaper white-label Android tablets appeal to a broad swath of consumers.
For better or for worse, price is becoming a more important factor in tablet choice. But it’s not the only factor, or even the primary one. Forrester’s data shows that the top reason consumers don’t buy tablets isn’t price or technology—it’s because they say “I don’t think I need it.” It’s about the services—what you can do with the device, which is why Apple, Amazon, and B&N have succeeded in the US where pure hardware plays have failed.
In 2012, disruptive product strategies stand the best chance of winning. Whether it will or not, we think Apple should launch a smaller, cheaper iPad to ward off competition from Amazon. We think Amazon should combat Apple by licensing its platform to other hardware OEMs. And we think OEMs like Lenovo, Toshiba, Samsung, and HTC should abandon pure Android in favor of Windows, at least in the US. Strong calls—we’ll see who answers.