As Google’s Nexus 7 tablet launches to rave reviews, it appears Apple’s death grip on the market could be slipping according to new research from iGR that found a shrinking number of consumers who only consider an iPad.
In a November 2011 survey, iGR found that 17 percent of respondents indicated that they would only buy an iPad 3, a group iGR refers to as Apple loyalists.
By May of this year, however, that number of respondents who would only consider an iPad had dropped to 7.7 percent, representing a 55 percent drop in the number of Apple loyalists in just six months.
“Put simply, there are fewer potential Apple-only tablet buyers today than there were a year ago,” Iain Gillott, founder of iGR, said in an interview with Wireless Week. “To me, this suggests that there may be an opportunity for competitors to win buyers to their platforms.”
Amazon’s Kindle currently rules the 7-inch tablet market, but Google’s Nexus 7 is raising some eyebrows, as it launches with the latest version of Android (Jelly Bean) and an attractive $199 price point.
Gillott notes that while devoted Apple buyers might be more willing to consider other tablets, the premium respondents are willing to pay for Apple products has only dropped 5 percent in the last six months, meaning consumers still perceive higher quality and better user experience in the iPad.
“People are still willing to pay a whole lot more for an iPad, so Apple is still looking pretty good,” Gillott said.
According to Gillott, the bad news represented by iGR’s most recent findings is that Apple may have saturated its market.
“The good news is they’re still commanding the premium. That bad news is that if you go down to 7 percent for those who won’t consider anything else, well, that means that you’ve gotten through the faithful,” Gillott said.
Among a number of other factors covered in the report were what Gillott called “dramatic differences” in the demographics—income, age, sex—of the Android crowd versus those who purchase iPads. He says there are just certain demographics that you can target with an Android and certain demographics that are more open to Apple products.
That said, Gillott has to chuckle when asked whether he gives any credence to the recent storm of iPad Mini rumors. He said that while Apple might be able to trump the Kindle Fire, which he called a “glorified eReader,” in quality, it remains to be seen whether shrinking the screen size would actually bring down the price enough that Apple could makes money at the lower end of the market.
“You can get a 10-inch refurb iPad for $400, so why bother? The screens are not that much cheaper, so all Apple would be doing is giving up margin. Unless, that is, they can double sales and lowball the vendors and component suppliers more than they already do,” Gillott said, noting that if Tim Cook thought he could make money on a smaller iPad he might do it just show that he could and to shake the shadow of his larger-than-life predecessor, Steve Jobs.
