Will the new Microsoft tablet dominate Android tablets?

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Unit shipments in 2013 of tablets operating under Windows 8 and Android, respectively.
Reference date: Dec. 31, 2013, 24:00 EST

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● Yes
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Wiki article

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Microsoft Surface RT with touch cover - Wikimedia: Creative Commons Attribution 2.0 Generic license

Background

Microsoft is expected to launch a Windows 8 tablet later in 2012. As the differentiating factor versus the current market leader, Apple's iPad, the tablet will come pre-installed with Microsoft Office.

Recently, Kathryn Huberty, a Morgan Stanley analyst, opined that the new Windows tablet will overtake Android's tablet sales rapidly and become the #2 in the tablet market, as the strategic inclusion of MS Office would attract significant first buyers from the business segment. Morgan Stanley expects future tablet market shares as follows: Apple 46%, Microsoft 25%, Android 22% and all others combined 7%. [2]

Analysis

Comparative developments in the smartphone sector

The smartphone segment has seen a race between Android, iOS and Windows before, with a rather different outcome:

Enter iOS -- In the beginning of 2007, iOS entered the smartphone market with the Apple iPhone. At this point, Symbian and RIM have a combined market share of approximately 80%, with Windows playing a minor role at 12%.

Enter Android -- In the third quarter of 2008, i.e. 18 months later, Android enters the race. By this time iOS had reached a market share of 13%, mostly at the expense of Symbian. In only two years, by the third quarter of 2010, Android was able to overtake iOS the latter still growing but at a slower pace. MS Windows already suffering a market share erosion ton to 11%.

Result -- By Q1 2012, Android again more than doubled its market share, reaching approximately 60%. The OS effectively wiped out Symbian, RIM and Windows. Hence Window’s tight integration of MS Outlook did nothing to avoid market share plummeting to 2%.

Developments

2013 Quarter 1 Results -- During the first quarter of 2013, 17.6 million Android tablet devices were sold and 3 million Windows tablet devices were sold. [1] Windows 8 tablet market share was 7,5 % versus 43,4 % for Android. The dynamics of the tablet market trended towards smaller devices where Microsoft has no product yet.

Result

Kathryn Huberty of Morgan Stanley was astronomically off when predicting that "Microsoft shifts from a challenged to a best-positioned company." [2] In reality, Android had a market share of 62% with 121 million units shipped, which is 30 times more than Microsoft's 2% with only 4 million units. [3]

Resources

  1. Windows 8 tablet sales - PCWorld, 25 April 2013
  2. Tablet Landscape Evolution - Window(s) of Opportunity - Morgan Stanley Research, 21 May 2012
  3. Android takes 62% share of tablet market in 2013 - Computerworld, 3 March 2014

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