When the "new iPad" (note that Apple does not refer to it as the iPad 3) launched in March 2012, it was more or less a foregone conclusion that Apple would be able to quickly sell a great many of them. Apple itself suggests it sold over 3 million iPads in the four days following the launch. At the time of this writing, the company is well over five million new iPads sold, and destined to continue its meteoric growth, especially in the enterprise. Any hope that Apple's competitors may have had that its overall dominance would begin to diminish has quickly faded - to paraphrase Mark Twain when he discovered that the New York Journal had printed his obituary, "Rumors of iPad market erosion have been greatly exaggerated."
Although the iPad's market growth across all market segments — consumer and enterprise — has been nothing short of phenomenal, and has generally given rise to the notion that 2012 will very likely be dubbed the year of the tablet, we are in fact still in the early days of these mobile devices, and it isn't necessarily clear how things will evolve over the next 12 to 18 months. The current tablet world is decidedly one of Android and iOS platforms at this point. Microsoft (and to date its partner Nokia) has refrained from introducing a Windows Phone 7-based tablet, and has put all of its mobile tablet chips into the upcoming release of Windows 8 on ARM (WOA).
Our reference to the Lord of the Rings and its famous "One ring to rule them all" line is not merely a nod to Apple's current dominance, but also a reminder that at the end of the trilogy the one ring was ultimately destroyed. There should be no presumed hegemony for iPad despite its current technical and social market position and its ability to continue to solidify those positions at this point in time. In fact, Mobile Enterprise would prefer to see an enterprise world with more competitive market share across all tablet products overall to keep Apple in check.
An interesting reason that Apple has been able to maintain its now two year dominance of the tablet space can be traced to two things. First, Apple has delivered and continues to deliver a technically superb product. Second, it has legitimately earned high levels of user desirability because it is a technically superior product. Or rather, as it launches next generations Apple is able to maintain its leadership role in being first to market because its products remain technically superior.
This is the key reason that Apple is not only able to bolster its market share with new products but is also able to keep older products in the market as well. The new iPad isn't going to cannibalize sales of the iPad 2 — Apple's pricing models (e.g. dropping the cost of the iPad 2 by $100 when the new iPad launched) creates new market opportunities for the iPad 2 (which in turn is still considered a technically superior product — not necessarily by professional technology reviewers, but rather by those that matter more, users who vote with their dollars).
With so much going for it Apple represents a formidable competitor. Are there or will there be any tablet vendors that can play the role of Frodo Baggins and in the process provide the competitive devices that will give Apple real competition? The short answer? Not today. The medium term answer? Not any time soon. The longer term answer looking out to 2015 - 2016? Uncertain.
Only when enterprises finally begin large scale replacements of laptops with tablets will a reliable answer emerge — our bets are with Microsoft as the real longer term contender, and not with Android. Even then, it is very likely that we'll see a repeat of smartphone market dynamics. On a device by device comparison the iPad will likely remain the single largest enterprise tablet deployed. In the aggregate, however, WOA tablets collectively will probably push iPads into second place and give WOA the single largest share of the market (as is the case with Android in the smartphone market today).
The Top Five Selection Process
For our cover story, working towards determining what the top five tablets in the enterprise are and which are likely to keep those positions over the next year — while also looking to uncover the most likely challenger to the Apple crown, involved a three step process:
- In terms of field data, Mobile Enterprise relied on its partner ChangeWave Research, which took the tablet pulse of the enterprise for the period November 2011 through February 2012 (prior to the announcement and release of the new iPad), with research built around a substantial sample size of 1,604 enterprise users
- We then eliminated any tablets that showed up in the research that are not iOS, BlackBerry or Android devices (essentially this means older slates based on Windows 7, Vista or XP) as they do not represent either today's or tomorrow's tablets in any way
- We've added our own subjective perspectives to the research results, based on a combination of enterprise discussions and familiarity with the available devices
Windows 8 on ARM (WOA) tablets are not included in our roundup. Although a small percentage of users will look at these tablets when they emerge, the operative words here are "when they emerge." Until we have full production WOA machines there is no point speculating about them. We do anticipate that enterprise IT departments are likely to prefer them as we strongly believe they are very likely to be easy to manage and integrate into established enterprise environments.
This isn't currently an issue that takes precedence within enterprises. Most companies have not yet really begun to consider tablets as full scale replacements for laptops. But when they do finally arrive at that inevitable juncture, infrastructure integration with all things Microsoft and hard core enterprise Windows technology, Mobile Enterprise believes that most IT departments are going to lean heavily towards easy integration. We also anticipate that from a corporate CIO and CTO perspective BYOD will ultimately take a back seat when laptop replacement by tablets scales up to full enterprise priority.
Finally, rugged devices — whether they are handheld computers or rugged tablets — are not included for consideration in this cover story. Rugged tablets are not going to find homes within the general office worker/knowledge worker office environment, where the iPad and Android tablets primarily play. We will be covering rugged devices in detail and within their proper enterprise and business contexts in the upcoming Mobile Enterprise July-August 2012 issue.
What the Survey Numbers Say
It will come as no surprise to anyone that, as shown in the chart in Figure 1 — which indicates anticipated corporate tablet demand — the iPad is the undisputed king of the hill. In fact, it dominates the enterprise today in much the same way that Windows Explorer dominated the browser market for a decade, dating back to the mid-1990s, when its market share hit about 96 percent.
The iPad isn't quite at that stratospheric height, but with 84 percent market share it is close. It's remarkable for hardware to be this dominant, although we need to note that the software that runs on iPads is an integral part of its desirability. Unlike a browser - essentially an inexpensive software download, iPads cost real money, which makes that 84 percent share of the market far more remarkable than what Explorer achieved.
Apple has been able to sustain this remarkable market presence since dating back to the day in 2010 that the original iPad was announced. The chart in Figure 2 demonstrates Apple's firm grip on tablet market demand, and more or less confirms that although there have been tablets in the enterprise for a number of years (the Windows-based tablets noted earlier), it really is Apple that has not only invented the modern day tablet but that also created the market and dynamic market demand for them.
The 7 percentage point leap in iPad demand between November 2011 and February 2012 demonstrates anticipation for the announcement and release of the next generation iPad following the iPad 2. It was widely anticipated that the next iPad would deliver a retina quality display, a more powerful processor, and possibly support for LTE (high speed, next generation wireless data).
Survey respondents were also asked if an actual release of a new iPad (as opposed to an anticipated release) would affect their likely buying immediately following its release. In response 15 percent said that a new iPad would definitely increase the immediate new purchases of iPads. Apple, of course, did in fact release a new iPad (dubbed the "new iPad", and not iPad 3), and sales have skyrocketed - essentially as the survey results predicted would be the case.
The Top Five Are…
The entire tablet field of vendors continues to float about in Apple's substantial wake.
Every tablet vendor other than Apple is "down" from its previous position, all of which already represented essentially negligible market share. It is fair to assume here that the anticipated release of the new iPad not only drove up Apple's likely sales numbers but also put a damper on the competition. Note that the numbers shown in Figure 1 hardly look competitive relative to evaluating Apple against every other vendor. The more amazing number is the one of Apple against the aggregate group of competitors - Apple's 84 percent vs. 31 percent for the rest.
Taking into account our three step process defined earlier on, we are going to eliminate both Hewlett-Packard and Dell from this list. Neither company has a legitimate Android tablet in its stable that is robustly supported, and older Windows tablets such as those Hewlett-Packard still markets are excluded from consideration.
Amazon's Kindle Fire is a legitimate Android device (even though the OS itself has been heavily modified by Amazon), but we absolutely do not believe it is a legitimate enterprise tool. Heavy modification of the operating system equates to potentially significant security issues and the hardware compromises that Amazon had to make to keep the price under $200 takes the machine entirely out of enterprise consideration. It will certainly give other Android devices a real run for consumer dollars, but we do not consider it an enterprise play.
When we factor HP, Dell and Amazon out of the equation, the numbers shown in Figure 1 become even starker. Apple's 84 percent against "true" iPad competitors who made it onto the chart - Samsung, RIM, Asus, Motorola Mobility and Lenovo - offers an excellent definition of the word "dominant." These competitors can only muster a total of 18 percent.
Finally simple math eliminates Lenovo from consideration - it is the sixth remaining tablet on the list that is both a legitimate Android tablet and a legitimate enterprise mobile device vendor. However, sixth place on a top five list means Lenovo doesn't make the cut. Lenovo of course is a huge Windows enterprise laptop vendor, and we anticipate the company will make an aggressive show of it with Windows 8 - on the laptop, ultrabook and WOA tablet fronts.
Our top five enterprise tablets are:
- Apple - the iPad 2 and the new iPad
- Samsung - Galaxy Tab 10.1
- Research in Motion - BlackBerry PlayBook (with OS v2)
- Asus - Eee Transformer Prime
- Motorola Mobility Droid Xyboard 10.1
Other Tablet Vendors
There are other smart mobile device vendors that offer tablets that did not make it onto the ChangeWave charts. These include LG, Huawei and HTC. LG and HTC will continue to have market share in the smartphone segment of the market but they will not garner any tablet market share.
The Chinese vendor Huawei is a vendor worth keeping an eye on. The company is a major enterprise IT vendor outside of the United States, and at Mobile World Congress in February 2012 it introduced what it claimed at the time to be the fastest Android tablet on the market. These vendors, however, have yet to make a North American enterprise impact, and with the launch of WOA tablets imminent, their windows of opportunity for doing so are, we believe, behind them.
Motorola Solutions, the enterprise-side company that was created from the Motorola breakup from January 2011 (Motorola Solutions is, in essence, the group that was formed inside of Motorola when it acquired Symbol - a true enterprise-focused vendor), has a legitimate Android tablet now in the market, the Motorola Solutions ET1. It is primarily a retail industry design, with features that make it easy for retailors to customize. It is entirely possible and likely that the ET1 will garner a significant industry presence as an Android tablet, however we don't see it transitioning beyond the retail space into more general use in the office - either on a standalone basis or as a laptop replacement.
The Next 12 Months
Mobile Enterprise isn't yet ready to declare 2012 as the real Year of the Tablet. It is certainly The Year of the iPad, but once the iPad is factored out of the enterprise landscape there isn't much left to talk about…yet. Over the rest of this year we can anticipate the delivery of WOA tablets from the traditional enterprise laptop providers - Dell, HP and Lenovo are all likely to come roaring back into the picture, especially once enterprises begin to seriously task their IT departments with moving users from laptops to tablets.
Samsung will likely remain in the game, although it may fall to fifth place once the traditional vendors are back in, but we doubt Asus, Motorola Mobility or any of the other smartphone vendors will still be in the race next year. The dark horse on the tablet front that could very well stage a revival is Research in Motion (RIM). If RIM is able to deliver a truly special tablet when it launches its BB 10 operating system platform towards the end of Q3 2012, it might very well be able to re-capture the imagination of enterprise IT. Let's be clear about this - there is ample enterprise opportunity for RIM to win back the enterprise. We foresee very little opportunity for RIM to win over pure consumers - that is Amazon's Kindle Fire play and it is a game RIM can't possibly hope to be a player in.
We can anticipate that the tablet landscape in 2013 will be significantly different than it is today. With the exception, that is, of the iPad. As we noted earlier, the iPad will continue to dominate for the foreseeable future. And it should - through its combination of well-thought out pricing and its state of the art features, it's earned its rank for the next year as the number one tablet in the enterprise (and the consumer space for that matter).