Apple Inc. (AAPL) Stock Slapped by Tablet Sales Slowdown

Apple Inc. (NASDAQ:AAPL iPAd Pro

Apple Inc.  shares were down Wednesday following an IDC report that the global tablet market was down 7% in the 2Q versus the same period last year. This is the third straight quarter in which tablet shipments have seen a decline, negatively affecting the iPad maker who dominates the industry.

Apple Inc. (NASDAQ:AAPL iPAd Pro

Tablet market slowing

For the 2Q, tablet shipment came in at 44.7m units, a drop of 3.9% from the Q1, reveals data from IDC. The research firm notes the tablet market is slowing after it witnessed phenomenal growth with the introduction of the iPad in 2010.

However, IDC analyst Jitesh Ubrani believes, “with newer form factors (for PCs) and added productivity-enabling features… should be able to bring new vitality to a market that has lost its momentum.”

The IDC believes two factors are responsible for a decline in the tablet shipment. First, big screen phones are discouraging users from buying the tablets, and secondly, unlike the smartphones, tablet owners do not upgrade every year.

Apple leads, but others catching

Despite the decline, Apple  still dominates the market with 24.5% market share shipping 10.9m units in the quarter, a decline of 17.9% from the 2Q of 2014.

What can be seen as a concern for Apple is its market share dropped 3.2% from 27.7% in 2014 while Samsung share declined only by 1% from 18% last year to 17% in the 2Q of 2015. For the quarter, the Korean firm shipped 7.6m tablets, down 12% from last year.

IDC tablet research director Philippe Bouchard told MarketWatch, “We’re seeing a profound shift in the vendor landscape as the top two vendors, Apple and Samsung Electronics (SSNLF), lose share in the overall market.”

A loss for Apple and Samsung was a gain for Lenovo, Huawei and LG. Lenovo, the number three vendor, saw modest growth while Huawei and LG, both at fourth, witnessed explosive growth. For the quarter, Lenovo sold 2.5m tablets, up 6.8% from last year, accounting for 5.7% of the market.

Huawei doubled its sales shipping 1.6m units while LG shipped also shipped 1.6m units, up 246% from last star, IDC said. Overall, top 5 vendors accounted for 54% of the total market, the research firm said. All others vendors are placed in the “Others” category holding 45.6% of the market, a decline of 9.3% year over year, reports IDC.

On Wednesday, Apple  shares closed down o.32% at $122.99 while year to date, the stock is up almost 10%.

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Aman is MBA (Finance) with an experience on both marketing and Finance side. He has work as a Risk Analyst for AIR Worldwide, and is currently leading VeRa FinServ, a Financial Research firm. Favorite pastimes include watching science fiction movies, playing PC games and cricket.

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