iSuppli Ups iPad Forecast; ‘It’s the Software Stupid’

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Hours before Apple should announce its Q3 results, iSuppli has upped its estimates on sales of the iPad. Apple is now expected to ship just shy of 13 million iPads in 2010, a sizable increase from iSuppli’s previous forecast in April of just over 7 million units.

Looking beyond this year, iPad shipments should nearly triple to 36.5 million in 2011 and grow to 50.4 million in 2012. iSuppli is basing its estimates in part on Apple’s demand for parts.

The big question now is how well other suppliers will compete when they release new Android, Palm, Windows 7, and Chrome based tablets later this year and early in 2011.

“The iPad is shaping up to be the ‘Tickle Me Elmo’ of the 2010 holiday season, with product demand expected to vastly exceed available supply,” said iSuppli’s Rhoda Alexander. “Apple has hiked its iPad manufacturing goals to suppliers across Asia… Our latest research indicates there is much higher production than previously expected for two key components: LCD panels and NAND flash.”

The only limit to iPad sales at the momentum is production—not demand, said iSuppli, which pegs Apple’s share of the tablet market at 84 percent this year. Competitive tablets expected from brands such as Asus and Acer in Q4 won’t take any significant market share this year, said the research firm. HP should enter the market in 2011.

Both iSuppli and the Yankee Group say software, not hardware will determine the popularity of competitive tablets. From the crowds of competitors expected to launch new tablets by early 2011, the Yankee Group is closely watching HTC, which may be one of the first to use a Chrome browser.

Another tablet-maker to watch says the Yankee Group’s Dmitriy Molchanov is RIM. It’s expected to have its own OS 6 offering next year and “RIM’s tablet will have a competitive advantage in the enterprise market due to its security and compression features.”

The Yankee Group’s Carl Howe notes, “To my way of thinking the important part is not the hardware, but the software and applications being designed for tablets. Apple has succeeded with iPhone because it designed out software devoted to touch platforms, where most other vendors consider touch a function that they’ve added onto an existing platform. Until other vendors design for touch first, I think it’s going to be tough going (just my personal opinion), just as it took Microsoft until 1991 to have a Windows-and-mouse desktop comparable to the 1984 Macintosh.”

We’re not sure what that means for the 20 or so Windows 7 based tablets due in coming months. Howe says, “Windows tablets have been in the market for 5 years and mostly gone nowhere.”

A recent report in Digitimes said Apple will take a 93 percent market share in global shipments of tablets PCs followed by a 75 percent share next year. Is Apple going to dominate tablets as it did with the iPod?

Source: iSuppli

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