There has been intense speculation in the global media this week that Nokia will launch its first Lumia tablet with a Microsoft operating system at Mobile World Congress (MWC) in Barcelona, Spain, between February 25th to 28th, 2013.

Following extensive channel checks by our Tablet & Touchscreen Strategies (TTS) service, we understand Nokia will not unveil a tablet with a Microsoft operating system at this year's Mobile World Congress (MWC).

We believe Nokia's strategy will be "smartphones first" for MWC this year.

And rightly so. Nokia will want to expand its Lumia smartphone range and solidify its growing leadership of the global WP8 market. 

Tablet fans will need to be a little more patient!

According to the latest research from our Tablet & Touchscreen Strategies (TTS) service, global tablet shipments reached 25 million units in the third quarter of 2012. Apple iOS slipped to 57 percent global market share, allowing Android to capture a record 41 percent share.

Peter King, Director at Strategy Analytics, said, “Global tablet shipments reached 24.7 million units in Q3 2012, rising a sluggish 43 percent from 17.2 million in Q3 2011. Demand for tablets slowed due to ongoing economic uncertainty and consumers holding off purchases in anticipation of multiple new models, like the iPad Mini, during the upcoming Q4 holiday season. Apple shipped a disappointing 14.0 million iPads worldwide and captured 57 percent share in the third quarter of 2012, dipping from 64 percent a year ago. Apple’s slowdown allowed the Android community to make gains and Android’s global share of the tablet market now stands at a record 41 percent.”

Neil Mawston, Executive Director at Strategy Analytics, added, “Android captured a record 41 percent share of global tablet shipments in Q3 2012, jumping from 29 percent a year earlier. Global Android tablet shipments doubled annually to 10.2 million units. No single Android vendor comes close to Apple in volume terms at the moment, but the collective weight of dozens of hardware partners, such as Asus, Samsung and Nook, is helping Google’s Android platform to register a growing presence in tablets.”

Other findings from the research include:

• Global tablet shipments grew just 43 percent annually in Q3 2012, compared with 289 percent annually in Q2 2011. This was the weakest growth rate since the modern tablet industry began in Q2 2010;
• Microsoft captured a niche 2 percent global tablet share in Q3 2012. The imminent release of the new Windows 8 operating system will likely drive Microsoft tablet volumes higher during the Q4 2012 holiday season.

Exhibit 1: Global Tablet Operating System Shipments and Market Share in Q3 2012 [1]

[1] Shipments refer to sell-in. Numbers are rounded. The definition of tablet does not include e-book readers.

Rumors are emerging that Google will co-produce a Nexus Android tablet with Quanta and WonderMedia that will retail for under US$100 in Q4 2012. If the rumor is correct, it is likely to be available to entry-level consumers in developing and perhaps developed markets in Q4 2012.

Three initial points of analysis from our Tablet & Touchscreen Strategies (TTS) service:

1. Android is engaging in a race to the bottom on pricing. Google wants to force down Nexus pricing to attack rivals like Apple;

2. The profitability of such an ultra-low-price Nexus tablet is going to be modest at best;

3. The usability of such a low-price WiFi tablet will be questionable. Compromises will inevitably be made on component quality to minimize costs.

More analysis of ultra-low tablet sales by region can be viewed by clients here.

The Wall Street Journal is reporting today that Apple is rumored to have ordered global production of 10 million Apple iPad Minis for delivery in Q4 2012. That is a number which chimes broadly with this report we published on our Tablet & Touchscreen Strategies (TTS) service back in June 2012. The rumors of an 8-inch iPad Mini have been circling for some time and the hype is now starting to reach fever pitch as an expected October / November launch approaches. For sure, an entry-mid-level WiFi tablet market is rapidly emerging in both developed and developing countries. For example, Amazon Kindle Fire and Google Nexus 7 are actively targeting US consumers with smaller screens, while Micromax is beginning to gain solid traction across India with several 7-inch models. Will the iPad Mini launch with 3G cellular connectivity as a differentiator? Probably not, due to cost reasons, but it will almost certainly be tetherable to 3G hotspot cellphones. More analysis of cellular tablets, and tablet sales by display size, can be viewed by clients here and here.

According to the latest research from our Tablet & Touchscreen Strategies (TTS) service, global tablet shipments reached 25 million units in the second quarter of 2012. Apple rose to 68 percent global market share, its highest level for almost two years. Microsoft tablets remain niche, but attention is turning to the upcoming Windows 8 launches.

Global tablet shipments reached 24.9 million units in Q2 2012, jumping 67 percent from 14.9 million in Q2 2011. Demand for tablets among consumer, business and education users remains relatively healthy. Apple shipped a robust 17.0 million iPads worldwide and maintained its strong market leadership with 68 percent share during the second quarter of 2012. Apple continued to shrug off the much-hyped threat from Android and the iPad’s global tablet share is at its highest level since Q3 2010.

Android captured 29 percent share of global tablet shipments in Q2 2012, remaining static from 29 percent a year earlier. Global Android tablet shipments grew by more than half to 7.3 million units. Despite high expectations for companies like Amazon, Samsung, Acer and Asus, the Android community has yet to make a serious dent in Apple’s dominance of the tablet market. Unspectacular hardware designs, limited uptake of cellular models and a modest number of tablet-optimized services have been among some of the main reasons for Android’s mixed performance so far.

Other findings from the research include:

• Global tablet shipments grew 67 percent annually in Q2 2012. Demand remained relatively healthy, although this was the industry’s slowest growth rate since the finger-driven tablet market began in Q2 2010, as shipments of some Android and Apple products moderated slightly in a volatile world economy;

• Microsoft captured a niche 1 percent global tablet share in Q2 2012. The upcoming release of Windows 8 later this year cannot come quickly enough for Microsoft, so its hardware partners, like Dell, can start competing more effectively in the tablet space.

Exhibit 1: Global Tablet Operating System Shipments and Market Share in Q2 2012  [1]

It is being widely reported a top civil court in the United Kingdom has provisionally ruled that Apple will need to place a notice on its website for several months stating that some of Samsung's Galaxy tablets did NOT copy the iconic iPad's hardware design. The provisional ruling also requires Apple to place adverts in major national UK newspapers, like the Financial Times, to state the same claim. Only the UK, and no other country, seems to be affected at this stage. If the UK ruling gets implemented, this will be a small psychological win for Samsung, following some minor legal losses against Apple in other parts of the world recently, like the US. The UK is the largest tablet market in Western Europe, bigger even than Germany and France. We forecast the active installed base of tablets to grow over 100% in the UK this year. More details of that UK forecast, and 87 other countries worldwide, can be downloaded by clients of our Tablets & Touchscreen Strategies (TTS) service from this published report.

I don’t often refer to competitors’ reports as the analyst community generally likes to maintain a friendly distance. But Canalys’ announcement that tablets should be counted as PCs pretty much forces a reaction.

Canalys appears to be taking a technology-based approach to segmentation. So the fact that tablets have fast processors, can run productivity applications, offer email, and can access the internet, puts them in the same category as PCs, which also do these things. The absence of a keyboard, and the presence of a touch screen, are seen merely as customer options, just as one might specify a blu-ray disc drive or extra memory.

Canalys concludes that the “PC” market is therefore doing extremely well at the moment, largely because of the success of the tablet category.

Segmentation arguments are one of the many joys of industry analysis. Lines are invariably blurred, definitions hazy and perspectives inevitably conflicting. Market forecast buyers must always ensure they understand what is and is not included in any given segment, as this is often a key reason for variations in market estimates from one source to another.

But in spite of these challenges, Canalys seems to be stretching things just a little too far on this occasion. If we want to count the market for “computing devices”, fair enough. Let’s bundle in desktops, notebooks, netbooks, tablets, MIDs, smartphones, and a fair few TV set-top boxes and other devices as well while we are at it. They all offer a similar combination of technical functions, though each is clearly better suited to some more than others.

However precise we try to be about technology or functional definitions, sooner or later, we also have to consider user perceptions. If it surfs like a tablet, plays games like a tablet, and stimulates envy like a tablet, it probably is a tablet. And no amount of ivory tower contemplation will persuade Apple’s iPad customers they have bought a “PC”, however much Microsoft and Intel might wish they had.

Good luck with this one, my friends - you are going to need it.

David Mercer

Client Reading: Global Tablet Sales Forecast by Country