Apple and Amazon may meet one another head-on this year, as the retailer launches its app store and mulls an Android tablet. However, in 2010 each still dominated a different device segment, and helped one another more than they hindered. Apple’s iPad accounted for a massive 90% of the tablet market in the third quarter, according to new calculations from IDC, while Amazon increased its share of the ereader space, securing almost 42% for its Kindle product. The Kindle bookstore and app also thrived on non-specialized platforms, including the iPad itself, where various surveys show it has proved more popular, and a bigger revenue generator, than Apple’s own new iBookstore.
In Q3, the iPad secured 90% of 4.8 million units shipped worldwide, a figure that was up from 3.3 million in the second quarter. Of course, there was virtually no competition ‘ the most high profile tablet in the smaller 7-inch form factor, the Samsung Galaxy Tab, gained its broadest distribution in the fourth quarter. But it is clear that Apple has a hugely valuable head start, at least in developed economies, and is now readying ‘iPad 2’, possibly running a dual-core processor and the iPhone 4’s Retina Display high resolution touchscreen.
For 2010 as a whole, IDC estimates that 17 million ‘media tablets’ will have shipped, and this figure will rise to 44.6 million in 2011 and 70.8 million in 2012, with Android gaining significant ground. It defines media tablets as those with lightweight or mobile operating systems and either ARM or x86 processors. By contrast, ‘tablet PCs’ have full PC operating systems and x86 chips only.
In the ereader sector, shipments were up 40% year-on-year to 2.7 million units, driven by price cuts. The US was still the main driver, accounting for almost 75% of the total, even though Amazon has been expanding Kindle distribution into many markets, and has produced localized devices and stores for a few countries like the UK.
Other well regarded ereaders, like the Barnes & Noble Nook and NookColor, remain US-only, though Samsung’s readers have wide distribution. Higher average prices and lack of a fully integrated store keep Samsung in fourth place in the sector though, with only 8.4% of the shipments in Q3. B&N was in third place with 15.4% and the surprise number two was Pandigital, with 16.1%, trading on its incorporation of both LCD and e-ink modes into its devices. IDC expects ereader shipments to total 10.8 million units for 2010, rising to 14.7 million this year and 16.6 million in 2012.
Of course, both Apple and Amazon will have a sharp eye on Google, as its Android OS gets upgraded to support tablets; as its Chrome OS devices appear on the horizon, offering an alternative, cloud-oriented approach to that of the slate; and as it pushes a new content model for books and other items.
While Apple and Amazon may clash over their respective devices and stores, they support similar approaches to content, particularly books and newspapers. They offer a carefully controlled store with a slick user experience, offering paid-for downloads and some free items, and with content protection. Books have not seen the same onslaught from free and DRM-exempt offerings as music, but newspapers and magazines have been decimated by the free web ‘ leading major publishers to seize on the Kindle and iPad as ways to protect their copy, and charge for their products in return for an optimized reader experience. Rupert Murdoch is even planning a daily newspaper specifically for the iPad, though the launch has been delayed.
Google, by contrast, champions free web-based content everywhere, with revenues relying on advertising and links. In December, it replaced its low profile Google Editions with a fully-fledged Google eBookstore (US only for now), and now it has strengthened its efforts by acquiring eBook Technologies.
The smaller firm specializes in both ereader hardware and content publication and distribution systems, though its main focus seems to be on the reading experience for multiple devices. Its former CEO John Rivlin is the co-inventor and patent holder of a secure ebook delivery system and the co-inventor of a patent pending system to provide offline catalog shopping via ebooks.
The purchase should add new functionality to eBookstore, which will go international around mid-year. This shopfront is less pure in concept than Editions, which was all about free, out-of-copyright and public domain titles. But the compromises in the newer offering ‘ such as including paid-for items ‘ make it more threatening to Kindle and iBookstore, especially if Google integrates its user interface and billing more seamlessly with Android ereaders and tablets.