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Cheaper rivals eat into Apple’s China tablet share

Wednesday, 21 Aug 2013 | 9:48 AM ET
Sean Gallup | Getty Images

Apple has lost more than 40 per cent of its share of the Chinese tablet market over the past year to cheaper rivals led by Samsung Electronics, as devices based on Google's Android and other operating systems rapidly overtake the US company's gadgets.

In the second quarter, Apple shipped 1.48m iPads in China, 28 per cent of the tablets shipped in that market, according to research firm IDC. Samsung shipped 571,000, or 11 per cent of the total.

The data echo statistics showing Apple is losing ground in the tablet market worldwide. Apple's global tablet market share dropped to 32.4 per cent in the second quarter from 60.3 per cent a year earlier, IDC said earlier in August.

(Read more: Blinged out: New Apple iPhone may be gold)

While iPad shipments globally dropped 14.1 per cent year-on-year in the June quarter, shipments in China continued to grow but not as fast as competitors', rising 28 per cent compared with the same period last year, IDC said.

That compared with triple-digit growth for other leading brands in the Chinese market. Samsung almost doubled its market share to 11 per cent by more than tripling shipments, while Lenovo's share slipped to 8 per cent though sales doubled.

"Most . . . Android players are growing with strong price advantage," said IDC analyst Dickie Chang. "Samsung, Lenovo, Asus, and Acer are providing more competitive products with [countrywide reach]. Meanwhile, consumers are familiar with Android OS from smartphone use."

The waning growth of Apple's iPad shipments follows a similar trend in smartphones, where Android-powered devices have dethroned Apple and where new Chinese brands also are increasingly strong competitors with cheap feature-rich smartphones.

A principal factor in the rise of Android tablets has been the falling price of components. That has enabled lower-cost Chinese brands to make their presence felt in the tablet market.

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The average per-piece price of the touch panels used in 7-inch tablets fell 7.5 per cent to $15.60 between the fourth quarter of last year and the first quarter of this year, according to supply chain analysts at IHS.

Taiwanese chipmaker MediaTek, an important supplier to low-cost Chinese smartphone makers, has been focusing on new chips designed for tablets, while cheaper Chinese chip designers have been jumping into the tablet market too.

Mr Chang said Apple's slower iPad shipments growth came as the company adjusted its Greater China channel inventory strategy to healthier levels, after inventory rose in the first quarter even as it shipped 3m iPads in China.

Apple could turn things round later this year when the new iPad launches in China, said Mr Chang. "Meanwhile, if Apple cut the price of previous generation [products] . . . more consumers would love to buy the Apple iPad."

(Read more: Apple to probe alleged violations in China supplier plants)

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