GN Focus | Smart Devices

Google takes on Apple

Android has taken a bite of Apple’s share in the tablet market and is now shifting its focus to the smartphone segment. And will Microsoft have a say?

  • By Gareth Kurt Warren | Features Writer
  • Published: 08:00 November 22, 2012
  • GN Focus

  • Image Credit: Corbis

Smart devices have now changed the very way we live, communicate and do business. And our appetite for these devices only seems to be growing.

Research firm Gartner expects global sales of smart devices to hit 821 million units this year and to touch 1.2 billion in 2013. In total, smart devices are expected to account for 70 per cent of devices sold this year.

By 2016, two-thirds of the world’s mobile workforce will own a smartphone and 40 per cent of the workforce will be mobile, says Carolina Milanesi, Research Vice-President, Gartner. "For most businesses smartphones and tablets will not entirely replace PCs, but the ubiquity of smartphones and the increasing popularity of tablets are changing the way businesses look at their device strategies and the way consumers embrace devices," she says.

Statistics also indicate that more than half the smartphones (56 per cent) purchased by businesses in North America and Europe in 2016 will be Android devices. "Today, the wide range of brands and price points that the Android ecosystem is offering is winning over users. While Apple remains the heartbeat by which the market moves, Google has rapidly become its arch-rival," says Milanesi. These battling heavyweights also need to watch their backs for other competitors, with Microsoft looking to challenge with its Surface tablet.

Android has made significant inroads in the tablet market and is seeking a repeat in the smartphone segment. International Data Corporation (IDC), a market intelligence firm that specialises in research in IT companies and markets, released a survey this month that confirmed Google’s climb to the top. The report found that three of four smartphones shipped worldwide in the third quarter of this year ran the Google-backed Android mobile platform.

The march of smartphones

Part of the growth is being driven by lower prices. Omar Kassim, founder of JadoPado and CEO of Al Bogari Holdings, says JadoPado’s mobile phone sales are about 70 per cent smartphones and 30 per cent traditional phones.

"I feel the line between smartphones and traditional phones is blurring. Now you can pick up a smartphone for about $100 (about Dh367). The market is filtering down into a feature-phone segment," says Kassim.

In terms of current winners in the region, JadoPado’s sales figures indicate that Apple and Samsung are neck and neck with HTC and, surprisingly, Nokia close behind. As far as crowd favourites go, Kassim says pricing is a very important factor. It is, however, not the determining factor as the features of the smartphone are equally important. "For example, the Nokia Lumia 920 — even though it is heavier and larger than most, its camera is strong. We are seeing a huge demand from customers and this does not usually happen with Nokia products," says Kassim.

Triple-digit growth

The tablet market has been no less eventful. IDC reports that Apple’s worldwide share of tablet shipments fell from 59.7 per cent a year ago to 50.4 per cent, while Samsung leapt from 6.5 per cent to 18.4 per cent. Samsung, Amazon and Asus picked up the share lost, with Samsung surging ahead thanks to a 325 per cent growth in shipments on the previous year.

With the entire tablet market growing at 49.5 per cent over the last year and with a number of new launches since then, it’s no surprise that analysts expect the tablet to be a top gift this Christmas. Market research released last month by Maritz Research indicates that 15 per cent of tablet buyers would, if given the chance, purchase a tablet before a computer, smartphone or even a television.

Besides consumer use, sales of tablets for business use are expected to climb from 13 million this year to 53 million in 2016, Gartner says.

"People coming in at this point are a wide cross section of society. They held back initially to see if it was a fad but are now seeing these devices everywhere they go," says Rhoda Alexander, a tech analyst at IHS iSuppli, a market research firm that covers the electronics sector.

Pricing adjustments

The Apple iPad mini made its first appearance in the UAE market at JadoPado.com, with the 16GB Wi-Fi iPad mini priced at Dh1,849, dropping to Dh1,699 a few weeks later — still priced about Dh500 more than Apple’s suggested retail price.

Regarding price discrepancies, Kassim says, "I wish we could match Apple’s pricing. However, our prices depend on product sourcing. Some of our initial stocks came from Hong Kong, and at this stage, they do not come from distributors. They come from people standing in line at an Apple store or from wholesalers who then ship them out to wholesalers here in the region."

Kassim does reassure us that prices do tend to drop quickly. "It is always a price vs time thing. Prices usually tend to correct quickly and usually fall lower than its actual price. And this usually happens after an official launch in the country."

With Apple, regional launches usually took up to 90 days after initial announcements. This has, however, now reduced to 60 days. If these estimates prove correct, analysts might be right and many of us will have a brand new Apple in time for Christmas.

— With input from agencies

Laptops: Not dead yet

Despite a drop in figures with Acer, Asus and Toshiba all seeing falling sales, Apple’s fan base and Samsung’s hybrid technology seem to be keeping the laptop segment afloat. Digitimes Research’s senior analyst Joanne Chien reports a sales slump of 4.5 per cent sequentially and an 11.6 per cent drop year-on-year in the third quarter of 2012. Ultrabooks share a similar fate — an IHS iSuppli report states an estimated 10.3 million units would ship worldwide in 2012, down from a previous forecast of 22 million units.

But Samsung expects 10 per cent annual growth by volume and 25 per cent growth by PC sales in 2012. Chien also reports that MacBook shipments increased by 30 per cent sequentially in the third quarter. Acer and Google’s C7 ChromeBook looks like a winner with its $199 (Dh731) price tag. And with all major players making hybrid devices, perhaps the laptop is evolving, not dying.

— G.K.W.

GN Focus