Apple currently dominates the lucrative tablet market with its wildly popular lineup of 9.7-inch iPads, and will likely continue to do so for the foreseeable future.
Rival device makers have launched a wide range of tablets in an effort to challenge Cupertino’s mobile stranglehold, including Amazon with its 7.0″ Kindle Fire and Samsung with its 7.0″, 8.9″ and 10.1″ Galaxy Tabs.
As NPD-In Stat analyst Stephanie Ethier points out, manufacturers are attempting to implement various strategies as they strive to differentiate their next-gen tablets from Apple’s iPad which has set the bar thus far.
“Screen size has emerged not only as a key differentiator, but also the leading indicator of different tablet usages. Indeed, new research highlights top tablet usage scenarios based on device screen size and provides market insight based on the different tablet form factors,” she explained.
“For example, devices with smaller form factors in the 3.5″ to less than 7.0” range, spanning PMP and tablets categories, best serve entertainment needs that are typically considered complementary to everyday activities like commuting, exercising, and other on-the-go activities.”
According to Ethier, worldwide shipments for devices with screen sizes between 3.5″ to less than 7.0″ are expected to decline to 15.6 million in 2016. In contrast, tablets in the 9.7″ to less than 11″ form factor category will represent 65% of worldwide tablet shipments, with the bill of materials for a 9.7″ tablet falling to a sweet spot of $246 by 2016.
However, despite anticipated price erosion, revenue in the 7.0″ to less than 8.5″ form factor represents one of the brightest spots in the tablet market due to anticipated Amazon Kindle Fire demand. To be sure, analyst Jordan Rohan recently estimated that 6 million Kindle Fire tablets have already been sold, which puts it right on par with the rate of sales of Apple’s first iPad.
“Amazon’s device proliferation strategy has broader implications than most appreciate,” Rohan wrote in an industry note.
“Tablets including iPad and Kindle Fire are rapidly taking share from PCs and notebooks. [Clearly], Kindle Fire has staked out an important market position due to its loyal Amazon customer base and attractive (low) device pricing.”
