Despite the usual mockery and skepticism, Apple has once again proven why their brand still carries authority The International Data Corporation (IDC) just published their Worldwide Quarterly Tablet Tracker for Q4 2015 and with it comes two interesting observations: (1) the iPad Pro outsold the Surface 3, Surface Pro 4, and Surface Book combined over the holiday season and (2) standalone slate tablets (i.e. devices sans keyboard) are basically dead or dying.
Overall, the tablet market is still facing a decline similar to the general PC market, but within that decline two-in-one devices and detachable tablets are rising significantly.
Here are the IDC figures:
- Q4 12015 saw 65.9 million tablets shipped, down -13.7% year over year
- Total tablet shipments for 2015 were 206.8 million, down -10.1% from 230.1 million in 2014
- Shipments for detachable tablets reached an all-time high of 8.1 million devices
- Pure slate tablets experienced their greatest annual decline to date of -21.1%
- Detachable tablets more than doubled their shipments during the fourth quarter of last year
The news here is clear, folks: straight up tablets with no ability to expand to other categories are on their way out. Consumers want a tablet than can replace their computer, or, at least, approach that realization. In that sense, Microsoft was ahead of the curve in anticipating the Surface brand, and they are driving this category.
That's the good news. The bad news – for Microsoft – is that Apple had more success with the iPad Pro than many would have thought. According to Jitesh Ubrani, Senior Research Analyst with IDC:
"We believe Apple sold just over two million iPad Pros while Microsoft sold around 1.6 million Surface devices, a majority of which were Surface Pro and not the more affordable Surface 3. With these results, it's clear that price is not the most important feature considered when acquiring a detachable – performance is."
Microsoft's quarterly report noted that they did $1.35B in Surface revenue, which nearly doubled the amount from the previous quarter and was higher year-over-year. Regarding Surface sales, however, they were likely very much similar to holiday 2014. The reason for the claim is that Surface Pro 4 and Surface Book retail for higher prices than the Surface Pro 3 so while sales could be similar, the revenue captured would be higher.
An appropriate analysis here is while Surface is doing well, it is not significantly expanding regarding growth. Within one calendar quarter Apple was able to step in with an entirely new tablet and outsell Microsoft, who had many more SKUs for sale. Needless to say, even we are surprised by IDC's numbers (assuming their accuracy).
The other interesting analysis is that price is not a factor. While many have lamented the higher cost of the Surface series – even the anemic Surface 3 with an Atom processor – consumers are still willing to pay up when they see the value. This result is perhaps even more surprising with the iPad Pro as that device is not marketed as a replacement for a laptop, even by Apple standards.
As a whole, Microsoft made up about 2.4 percent of the entire tablet market for 2015. Apple (28 percent), Samsung (17.3 percent), ASUS (5.1 percent) and Lenovo (4.9 percent) all outsold Microsoft by a large margin.
Finally, IDC sees Lenovo as being positioned for a stronger comeback in 2016 with their new two-in-one Yoga, MIIX, and ThinkPad brands, many of which run Windows 10 (though some are Android-based).
Are any of you surprised by Apple's success with the iPad Pro? Will an improved Surface 4 – expected this spring – help turn the tables in Microsoft's favor? Let us know in comments.