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Small Tablet Segment will Get a Major Boost with iPad Mini

December 17, 2012

Small Tablet Segment will Get a Major Boost with iPad Mini

By Shankar Pandiath
TMCnet Contributor

According to a recent IDC (News - Alert) report, the introduction of iPad mini will expectedly boost the small tablet segment in Malaysia.

International Data Corporation (IDC), the premier global provider of market intelligence, advisory services, and events for telecommunications, information technology and consumer technology markets, has predicted that the Malaysian tablet market will shift toward a 55-45 percent split between larger slates and 7-inch models in 2013. Google (News - Alert) Nexus 7, which is manufactured by Asus, will be another major driving factor of the trend. The latest shift denotes a significant growth for the small tablet segment, which previously accounted for only 24 percent of the market share.

"Though 7-inch tablets are expected to cannibalize larger size tablets, its lower price point makes it a more affordable proposition, which is bound to attract new consumers," said Ryan Lai, associate market analyst for Client Devices at IDC Asia/Pacific. 

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“Appetite for smaller tablets is irrefutable and 2013 will see intensified competition in the smaller tablet space, during which Samsung's (News - Alert) current dominance is set to be tested, particularly by Apple’s iPad Mini. However, Samsung accumulated its market share under conditions where little competition existed. The arrival of the iPad Mini at a comparable price to the US and a RM100 price drop for the Nexus 7 represents the beginnings of a more competitive 7 inch tablet space in Malaysia," added Lai.

"Many enthusiasts were eagerly anticipating the launch of Asus' Nexus 7 back in September but the lack of an 8GB model and a perceived high launch price compared to the US for the 16GB model meant that many were left disappointed," continues Lai.

The primary reason for the market shift, according to IDC, is the Q4 arrival of the iPad mini and the reduced prices of Google Nexus 7. Samsung was the undisputed leader for the first three quarters of 2012. Samsung held 85 percent of the small tablet segment. The growing changes and the competitiveness will put Samsung under pressure as it will be losing its dominant position.

The affordability of seven-inch slates will be attracting first-time tablet buyers and will increase the overall size of the market. The small tablet segment is also likely to cannibalize sales of larger tablets as Malaysians now prefer the iPad. Analysts are pointing out the trend of consumers who are choosing the iPad mini over the larger iPad. If the larger tablets are neglected, the trend could affect Apple's (News - Alert) market share. Apple, according to the reliable sources, is reportedly facing component shortages for the smaller tablet. Apple doesn’t earn much on the iPad mini. The iPad mini's gross margin is less than that of iPad, which could lower the company's overall profits.

Thus, the arrival of Apple's much awaited iPad Mini will be a game-changer in Malaysia's tablet landscape, which will provide a boost for the 7-inch tablet segment.

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Edited by Brooke Neuman

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