Analyst: iPad Will Face Greater Challenges For Market Share

7-inch tablets and new touch-screen ultrabooks standing expected to dominate.

An analyst has said that the iPad will face greater challenges for market share from both 7-inch tablets and new touch-screen ultrabooks.

After the launch of the iPad Mini in October, fourth-quarter sales of 10-inch iPad models decreased by 9 percent in the U.S. and by 26 percent in Japan year-over-year, Citi analyst Glen Yeung said.

Market share for 7-inch tablets increased to 41.2 percent in the fourth quarter from 12.6 percent in the second quarter of 2012. The same period saw the share for 10-inch tablets dropping to 40.6 percent from 67.3 percent.

"But beyond simply the overall share loss, the data reveals a particular slowdown in 10-inch iPad sales in mature markets and a clear downward trend in tablet ASPs (average selling prices)," Yeung said. "After analyzing the data, we have new concerns about the health of the 10-inch tablet market and, absent any material innovations (we do not count a Retina Mini or lighter/thinner iPad 5 among these), we remain concerned about Apple's ability to maintain market share."

Yeung believes increased innovation from tablets won't come to fruition this year, but he does see exactly that deriving from ultrabooks. Intel said that all ultrabooks based on their Haswell processor are required to have touch capabilities; such systems will cost as low as $599. Yeung said that these types of touch-based, ultra-thin notebooks with an adequate price tag could create competition for the iPad and other 10-inch tablets.

While Apple's iPad remained the market leader for tablet shipments in 2012's Q4, its share has been continuously decreasing due to the emergence of cheaper Android slates throughout 2012.

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