Can the iPad survive the Windows 8 wave, or will history repeat for Apple?

This article may contain personal views and opinion from the author.
Can the iPad survive the Windows 8 wave, or will history repeat for Apple?
Much like CES and MWC have become parades for new Android devices, IFA has been the show for new Windows 8 tablets, and tablet/laptop hybrids. And, the question must be asked: With the wave of Windows 8 about to crest, can the iPad survive? The scene seems to be pretty similar to history that we've seen a couple times with Apple over the years. First, Apple was the king of PCs, then Microsoft took over by numbers. Then, the iPhone was the king of smartphones, until Google's Android army spread out. Now, the iPad is the king of tablets, but Windows 8 is looming large on the horizon.

The threat

To blindly say that Apple will continue to dominate the tablet market is something of a baseless endeavor, but Apple has withstood the threat from Android so far, and at least kept a majority of the tablet market. Android was able to whittle down Apple's lead in the tablet market from somewhere in the high 90% range, down now to somewhere in the low 60s or maybe high 50% range. It has been a slow decline, and even now premium 10" Android tablets don't sell particularly well. So, the iPad's lead has already been weakened, and Microsoft is a much more dangerous threat than Android. 

The key is in exactly what we've seen so far at IFA. Microsoft's hardware partners have continuously announced new tablet/laptop hybrid devices during the conference. And, these aren't devices that are limited by being tied to an App Store, Marketplace, or Play Store. These are devices that run full Windows 8 and have all of the freedom that entails. Additionally, these are devices that carry the Windows name. 

Apple has brand recognition, but Microsoft still holds the PC market by a pretty wide margin, and these devices fall just as much in line with that tradition than the new path carved out by the iPad. Windows has a huge amount of users, and when those users need a new computer, there is suddenly this new choice to either get an iPad, get a laptop and an iPad, or get a tablet/laptop hybrid. Sure, there are Android devices in the tablet/laptop hybrid market, but Android has even less market standing with PC users than Apple does. 

Potentially fuzzy math

The question will partially be in how sales are counted, because these devices could be counted as tablets, as laptops, or as a completely new category. So, we'd say that you should all be ready for some questionable statistics. When (not if) Windows 8 gains enough market share to be mentioned by either Apple or Google during a product announcement keynote, don't be surprised if only Windows 8 RT devices are counted as "tablets" by competitors numbers. Similarly, during a Microsoft product announcement keynote, don't be surprised if all Windows 8 hybrids and Windows 8 RT devices are counted under the same heading. 

And, more than likely, neither side will have numbers that are accurately portraying the market as it stands. The trouble with hybrid devices isn't just in categorizing sales, but in purchase intent as well. Some people may buy a Windows 8 hybrid with the intention of using it mostly as a laptop, and some will buy them to use mainly as a tablet with a full Windows experience. Or, given the average weight of these devices, we're likely to see many users splitting their time between use cases, which should put them into a new category of device. Plus, how do we differentiate between table/laptop transformers, where the screen detaches to become a tablet, with convertibles, where the screen and keyboard never come apart? Is one more of a tablet than the other? 

In the end, the honest numbers will fall into a hazy gray area that is nearly impossible to sort out. 

Apple may not care

Of course, then there's the other question: If Windows 8 does take over the majority of the tablet market from the iPad, will Apple care? 

Probably not. Apple has designed its business model completely on profit margins, not on market share. Microsoft and Google both require high market share to maintain profits. Apple gets a profit margin so large, that it can comfortably continue to exist in the 25-35% market share range. The company survived and thrived when its PC market share never cracked 10%. Now, it has seen its share of the tablet market shrink, and its share of the smartphone market fall quite a bit. But, Apple still records the highest profits around. 

This is what people mean when they say that Apple is the (*insert luxury car company here*) of the tech world. It has less to do with the quality of the product, than it does with what customers will pay, and the price that the company can command. People are generally willing to pay more for an Apple device, regardless of whether it is the best. Add that to the higher subsidies that Apple gets from carriers, and the way Apple controls its supply chain, and you've got the perfect recipe for big profit. 

Conclusion

In the end, that's why this feels so much like we're about to see history repeat itself all over again. To an extent, it would almost feel surprising if Windows 8 doesn't hold the majority of the tablet market within a few years. But, as long as units sold continues to rise, it doesn't matter if Apple's market share falls to just 30% of the tablet market, because its business plan will stay the same. The company will continue to make supply chain deals for cheaper components, and continue to keep as little inventory on hand as possible (its down to somewhere between 3 and 5 days of inventory right now), and that will keep the company profits high, which is all any business really cares about. 

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80 Comments

1. OptimusOne

Posts: 694; Member since: May 22, 2012

nice article

3. Non_Sequitur

Posts: 1111; Member since: Mar 16, 2012

I second this. Michael H. does an excellent job of accurately stating the truth with no bias turned towards any specific company whatsoever. Kudos for great writing!

54. TheLibertine

Posts: 484; Member since: Jan 15, 2012

Aw yeah. He just put it simple: iOS' biggest threat is not Android - nor is it treated in any way, as even ten percent market share are enough for it to comfortably live on and continue its quest to make "the best products in the world for t3h great profit". Apple always has been the alternative to Microsoft and it can continue to be on other markets as well. And Android's biggest threat is not iOS. How could it, Android came after iOS and slowly took away market share - the problem is, especially on the tablet market, it may have grown to slowly (iPad still has 69% - this is a point where I have to critique Phonearena and Michael H. - the Phonearena articles often do not share the facts clearly stated in other PA articles. This one clearly states the number as 69% just six days ago -http://www.phonearena.com/news/API-Apple-iPad-demand-to-raise-tablet-shipments-this-year-over-the-100-million-mark_id33640) to became "mainstream" - in fact, twenty percent (the rest is Kindle Fire and Windows 7) is not much for a company that heavily relies on dominating market share. Both Androids and iOS' biggest enemy is Windows 8 and it will most likely hit both of them in the face - the most-used OS in the world is clearly Windows 7, with 90 percent market share. (Mac OS and iOS combined have around eight:http://www.villeaho.com/2012/04/17/why-windows-8-matters-and-why-android-will-eventually-just-fade-away/) And every rational person would choose Windows 8 over Android, Apple-fans will stay Apple-Fans and Android fans Android fans. No question, Windows 8 will dominate - the world just Is not ready yet for an Android/iOS based world. The world, nine tents of it, is Windows. But who will survive? My guess is: Android will find the same niche as Linux, Apple will continue being Apple (dominate high-price market range, like it allready does: most PCs over 1000 dollars are Macs, most mobile phones over 500 dollars iPhones) and Microsoft the new "mainstream" as the iPad is now on the mobile PC market. Windows just blows away both Android and iOS - it is very open and flexible like the first one, and mature and fluid like the second one. The world will soon remember how great it just is and was - no secret that Jobs admired Gates in secret. Ah, also should be noted that Microsoft and Google are hating' each other more than most people do hate the iPhone - they will go against each other as their goal is market share, not profit unlike Apple. Anyway, great and important article.

60. PhoneLuver

Posts: 481; Member since: Jul 05, 2010

I feel that IOS as well as Android were amazing, but then stagnated somehow! They've added tons of tweaks, but no real new features over the years! RIM and Nokia are just some examples of very profitable companies with great software that rested on their laurels and after nearly collapsing as a result, have had to reinvent themselves. Windows 8 is a game changer! Let's hope that they can meet the challenge!

70. MichaelHeller

Posts: 2734; Member since: May 26, 2011

The article that you reference about the iPad market share is talking about a quarterly report of market share based on shipments. I'm talking about market share counted on overall install base, not just a 3 month slice.

11. The_Godfather

Posts: 196; Member since: Apr 26, 2012

Bottom line is no one wants to see or hold an old device again and again with the same UI.....I am more than sure that WIn 8 tablet would be a big hit in the market. If you look at large Enterprises they had been waiting for something like this why because it is a Windows platform and which is the best in the world. 1. Mate you want to play games -----> These tablets have got the power 2. You want to do Office work (not just surfing or watching videos) ---> Win 8 tablet would enable you to do whatever you have been doing on your computer 3. You want to transfer data from USB ----> You get USB ports 2. & 3. 4. How about presentation -----> You get HDMI 5. Can we capture the screen ----> Go for Samsung ATIV, Asus, Toshiba, Sony or Surface they all have different ways of capturing screen - shots 6. Can we sync? -----> No doubt about that 7. Applications -------> Everything from PC to tablet Apple iPad was a big hit in the market why because at that time Android and Windows platforms (for tablets) were not fully ready and robust. But now you have the best platforms out there and choices as well.

32. MeoCao unregistered

Windows 8 is very heavy so Windows 8 tablets can have only limited success and they will compete with laptops. RT is inferior to both Android and iOS so I don't think it will be successful but it can survive as distant 3rd in tablets.

34. The_Godfather

Posts: 196; Member since: Apr 26, 2012

If people won't buy a Windows 8 tablet because it weigh around 1.2 KG (including those keyboards n stuff) then I am speechless mate.

38. MeoCao unregistered

That's exactly my point, every W8 tablet has a keyboard and they are in fact a kind of laptop. They are too heavy to be used comfortably as a tablet.

48. -box-

Posts: 3991; Member since: Jan 04, 2012

W8 tabs have the keyboards as optional extras. If you had a keyboard for an ipad (and a case to carry it and attach it to) it would add weight and bulk. Windows 8 and RT will both be much more capable than ios, and as long as RT catches up to Android in tablet apps, it'll do just fine. I myself will spend the extra for a full Windows8 tab

57. MeoCao unregistered

Don't you notice that W8 Surface is much thicker and heavier than RT Surface?

50. haseebzahid

Posts: 1853; Member since: Feb 22, 2012

u probably use pc for casual stuff thats why u say it it will be treat for those who really use pc for many stuff for any weight and price

52. haseebzahid

Posts: 1853; Member since: Feb 22, 2012

why why why some one would compare a full windows OS to mearlly a moblie OS like IOS and android its just not camparable please stop it want to compare then try MACOS and Linux since they are full tablets dont meant anything with android but full linux/ubunto would have been better

58. MeoCao unregistered

That's my point, W8 will compete with laptops and not Android or iOS. RT will.

62. haseebzahid

Posts: 1853; Member since: Feb 22, 2012

:\ RT is not completly dull it can still run more then half of pc softwares not the heaviest but average if thats true then it still tops them both

2. Non_Sequitur

Posts: 1111; Member since: Mar 16, 2012

Windows 8 is so much powerful than iOS, even with the RT version. iOS is meant to be mainly for media consumption, and not for productivity. Also, I admit, it does it well. However, Android and Windows 8 both slaughter iOS in business and do well in media consumption. Windows is a very well known name, as well. I expect Windows and Android to destroy anything else in the tablet market, as Windows converts itself to a mobile OS with the power of a desktop, and as Android converts itself to have the power of a desktop in a mobile OS. Gentlemen, we have a very interesting couple of months approaching.

10. Veigald

Posts: 290; Member since: Jan 13, 2012

In my view it is Android who will be the big loser here. Apple has the premium brand and quality going for it, and Windows the productivity of the Office suite and ubiquity in both business and consumer domains. What does Android have to compete with those? With iPad mini and a slew of Win8 tablets, my guess is that within one year Android is at low single digit tablet market share.

14. Non_Sequitur

Posts: 1111; Member since: Mar 16, 2012

You raise a valid point! With this in mind, Android is still the number one selling smartphone OS and Linux is still gaining major ground in the PC market. This could indeed happen with Android tablets if Android doesn't start evolving into another distro of Linux pretty soon, but I think Android will always be a powerful and valuable player in the smartphone market.

21. 12Danny123

Posts: 87; Member since: Aug 18, 2012

Well in tablets. It's a different story. But I do want windows 8 and android to dominate and over take iOS fast. Apple can rot in hell for what they done to carriers, people ,economy, comsumers, ms and google. Android and wp8 shall crush iOS 6 to the ground

22. Non_Sequitur

Posts: 1111; Member since: Mar 16, 2012

Yep! Exactly. I love Microsoft and Google. Microsoft makes the best desktop OS because of simplicity and software compatibility (and is actually reasonable about their patents, unlike Apple) and Google makes awesome mobile devices. I hope they both succeed and Apple either steps up their game (using innovation instead of litigation) or gets crushed by MS and the Goog.

46. MeoCao unregistered

I love Google but not MS. MS has been abusing its monopoly of PC market for years. Thankfully we have Linux and open source movement to break the stranglehold of MS.

53. haseebzahid

Posts: 1853; Member since: Feb 22, 2012

but windows is many times more productive and efficient then linux allthough linux is open source it is only developer friendly not user friendly

59. MeoCao unregistered

Linux is much more efficient, but it's not supported by a strong ecosystem.

64. haseebzahid

Posts: 1853; Member since: Feb 22, 2012

u call it efficient -even installation is messy for most linux based softwares unlike windows -Simple copy paste for some files is not straight forward -need to learn the coomands or know half of them for just simple use -lets go to C programming ever compiled a code in win and linux same time wins got better options linux only give hardware access for free. -i used linux like 1 month and i was like who the hell says its better the Win i cant do simply things in simple way like in windows * only happy linux users are profetional developers NOT simple users

66. MeoCao unregistered

Efficient and convenient are 2 different things. Linux for PC is not supported enough so it's difficult to use but thank to Linux the cost of Windows is not over the roof and Windows is updated more often.

75. haseebzahid

Posts: 1853; Member since: Feb 22, 2012

lol who uses geniune windows :P

73. pikapowerize

Posts: 1869; Member since: May 03, 2012

but i think it will change to win8.. the OS isnt a friendly to a mouse navigator unlike its past version... i think that is microsoft biggest mistake now!!!

76. haseebzahid

Posts: 1853; Member since: Feb 22, 2012

welll u didnt have much knowledge about win8 it has two UI for tablets and for PC which is identical to win7 i heard it over the news its not a mistake its more option now

63. Non_Sequitur

Posts: 1111; Member since: Mar 16, 2012

Microsoft used to be a patent troll, but their patents are actually pretty valid and they don't troll HARDLY as much as Apple.

67. MeoCao unregistered

MS is never under threat like Apple is now that's why it is not as aggressive. But everytime anything big came out it was stifled by MS like Netscape. If were not for FireFox and Chrome we may still use that crappy IE5-6 now.

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