Market research firm IHS iSuppli has revised its global five-year tablet shipment forecast, which now estimates that 60 million tablets will be shipped this year and 275.3 units will ship in 2015. IHS had previously estimated that 262.1 tablets would ship in 2015. Most of the firm’s changes revolve around increased market share estimates for Apple’s iPad, though IHS still sees Apple’s share of the market sinking fairly quickly through 2015. The iPad is now expected to account for 44.2 million of the 60 million tablets that will ship this year, up from IHS’s previous estimate of 43.7 million units. Apple’s market share will drop to 74% in 2011 from approximately 85% in 2010, and it will fall to 43.6% in 2015. IHS’s earlier estimates places Apple’s share of global tablet shipments at 64% in 2011 and just 32% in 2015. “All the momentum in the media tablet market is with Apple right now,” noted Rhoda Alexander, senior manager covering tablet and monitor research at IHS. “The competition can’t seem to field a product with the right combination of hardware, marketing, applications and content to match up with the iPad. Furthermore, Apple’s patent litigation is serving to slow or complicate competitors’ entry into some key regional markets. With Apple lapping its competitors, many of whom are still struggling to get out of the starting gate, this remains a one-horse race.” IHS’s full press release follows below.

Media Tablet Forecast Increased as Apple’s Dominance Grows

August 24, 2011
RHODA ALEXANDER

Capitalizing on its shrewd strategy, as well as its competitors’ stumbles, Apple Inc. is set to increase its iPad shipments at a faster rate than previously expected in 2011 and beyond, causing the global media tablet market to exceed growth expectations during the next few years, according to data from the IHS iSuppli Display Materials & Systems Service, from information and analysis provider IHS (NYSE: IHS).

Global media tablet shipments now are expected to rise to 60 million units in 2011, up 245.9 percent from 17.4 million in 2010. The previous forecast issued in May predicted shipments of 58.9 million for 2011. The new figures will help propel media tablet shipments to 275.3 million units in 2015, compared to the previous forecast of 262.1 million.

“All the momentum in the media tablet market is with Apple right now,” said Rhoda Alexander, senior manager, tablet and monitor research for IHS. “The competition can’t seem to field a product with the right combination of hardware, marketing, applications and content to match up with the iPad. Furthermore, Apple’s patent litigation is serving to slow or complicate competitors’ entry into some key regional markets. With Apple lapping its competitors, many of whom are still struggling to get out of the starting gate, this remains a one-horse race.”

The Big Apple
Apple will ship 44.2 million iPads in 2011, up from the previous forecast of 43.7 million. IHS lowered its forecast earlier this year in light of Apple’s initial iPad 2 production and supply challenges. With those supply issues resolved, Apple’s production now is firmly on track to meet the expected strong second-half 2011 demand.

IHS also revised its iPad forecast upward, with shipments expected to reach 120.1 million units in 2015, up from the previous outlook of 97.9 million.

Apple is expected to account for 74 percent of media tablet shipments in 2011 and 43.6 percent in 2015. This compares to the previous forecast of 64 percent in 2011 and 32 percent in 2015.

IHS now believes Apple will account for the majority of tablet shipments through the year 2013, one year longer than the previous outlook.

The HP Way Out
While Apple has deftly played its hand in the media tablet market, its continued dominance also reflects the inability of competitors to mirror the iPad’s success. As a result, IHS has reduced its shipment outlook for alternative tablets at the same time that the iPad forecast was adjusted.

The latest and most dramatic example of the struggles of Apple’s tablet rivals came last week with Hewlett-Packard Co.’s announced exit from the tablet space and instead review opportunities to license its Web OS software to others. The move came just 14 months after HP acquired Palm Inc., whose operating system served as the basis of HP’s tablet product.

Makers of tablets using Android and other operating systems are encountering slower-than-expected sales for their products and facing other challenges, including lagging development of content and applications for their products.

Tablet Tactics in 2011
Other savvy moves by Apple in the tablet market in 2011 include its strong marketing and retail expansion not only in China but also other developing economies, as well as the continuing innovation of its tablet platform—a move that has allowed Apple to grab the headlines with reports of strong sales, new applications and compelling content.

Furthermore, Apple is still the only tablet player truly benefitting from peripheral advertising, with content providers promoting their iPad-enabled content. The iPad also has profited from being the early favorite in the education space, a factor that will help to boost sales during the third-quarter back-to-school season.

Finally, Apple is increasing its focus on information technology (IT) support staff, in response to growing interest in its products from corporate markets.

Feliz Navi-Pad
Apple’s run of success is expected to continue though the fourth quarter, with the iPad once again shaping up to be the hot gift of the holiday season. The iPad’s strongest competition may actually come from in-house, with the new iPhone expected to be rolled out this fall, rather than from any of its tablet competitors.

Coming Attractions
Apple’s tablet sales are expected to get another boost sometime in the first quarter of 2012, with the introduction of the iPad 3 employing the high-resolution Retina display. IHS believes Apple may take a page from the iPhone handbook and offer both the second and third generations of the iPad for a period of time. This would allow Apple to compete on price using the iPad 2—while simultaneously differentiating based on innovation with its new-generation product.

Over the longer term, Apple will benefit from its diversified market strategy that markets the iPad at the consumer, education and corporate segments. This will allow Apple to mitigate the impact of seasonal sales swings in the consumer market.

The expansion into China also will boost iPad sales in the first quarter, during the Lunar New Year holiday season. With the first quarter normally a slow sales season outside of Asia, the China sales will serve to smooth out the normal first-quarter sales dip suffered by electronics makers following the Christmas selling season in the West.

Here’s a head-scratcher: analytics company iSuppli has completed its analysis of Samsung’s GT-P1000 Galaxy Tab, and, according to their report, the device contains $205.22 worth of components and costs roughly $214.57 to manufacture. The Galaxy Tab has received some serious criticism for its less-than-competitive price-point ($599 in the U.S.) when compared with Apple’s 3G iPad ($629); iSuppli estimates that the 16GB 3G iPad contains $264.27 worth of components. The Tab’s most expensive bits are its 7-inch display and NAND Flash memory which cost $57 and $51 respectively. If iSuppli’s estimates are accurate, it would seem as though Samsung voluntarily put the Galaxy Tab at the higher end of the price-point spectrum.

Read

According to market intelligence firm iSuppli, Nokia’s N8 handset is stuffed with exactly $187.47 worth of components. The Finnish handset manufacture’s Symbian^3 device sells for €529 and $549 in Finland and in the U.S. respectively. iSuppli notes that the most expensive component is the device’s 3.5-inch Samsung AMOLED display and touchscreen panel, which carry a price tag of $39.25. Other high end components in the device include 16 GB of mass storage ($37.12), a 12 megapixel camera with Carl Zeiss lens ($31.08), and a $22 chipset the houses components from both Texas Instrument and Broadcom. Nokia is aiming to sell 50 million Symbian^3 devices; Nokia’s second Symbian^3 device, the C7, was just recently released.

Read

Analytics company iSuppli has completed their analysis of Apple’s sixth-generation iPod nano. The company concludes that the small, square, touch-screen media player costs the Cupertino company $45.10 to manufacture; $43.73 in materials and $1.37 in manufacturing costs. The most expensive components on the device are the 8GB of NAND Flash memory ($14.40), the display ($11.50), and the Samsung processor ($4.95). Apple sells 8GB model of the device for $149. Not a bad profit margin, eh?

Read

The Wall Street Journal is reporting that BlackBerry maker Research In Motion sold right around 150,000 Torch handsets during its opening weekend. The sales estimates come courtesy of RBC Capital Markets and Stifel Nicolaus. Curiously, the launch numbers keep being compared to the first weekend sales figures of the iPhone 4; which launched on June 24th of this year in five countries and on multiple carriers. The WSJ also calls into question the profitability of the handset for RIM. Research firm iSuppli pegged the cost of the slider’s components at right around $171 — with an additional $12 for manufacturing — bringing the total to $183. The LCD and Samsung flash-memory are the unit’s two most expensive parts and cost approximately $35 each. As a point of comparison, iSuppli estimates Apple’s iPhone 4 at $188 and the HTC DROID Incredible at $165. When compared component for component, the Torch’s part costs do seem a little steep. Again, the numbers are all speculative… but 150,000 seems to be an acceptable result for an opening weekend release on one carrier, no? What do you think?

Read

Although customers have yet to touch the device, let alone see it in person, that hasn’t stopped iSuppli from predicting that Apple will ship a whopping 7.1 million units of the tablet in 2010. The numbers, which iSuppli has called “conservative”, are based on a high volume of sales to both early adopters and those who are “attracted to the iPad’s unique touch-screen-based user interface”. The number is definitely up there, it’s the highest prediction we’ve heard, but it must be remembered that just a few days into pre-orders Apple supposedly sold more than 150,000 units in the US alone. Elsewhere, Apple itself is said to be surprised by the number of people that have registered their interest in the device. Even though the competition is sure to explode as we head deeper and deeper into 2010 and beyond, iSuppli is already speculating that 2011 will see sales of 14.4 million units with 2012 seeing 20.1 million sold. If any one company can move this much gear that truthfully serves no purpose other than content consumption, it’s definitely Apple.

Read

iSuppli is certainly the authority when it comes to pegging manufacturer costs in the world of handsets, but its latest report has a giant question mark stamped on the cover. Without actually having a handset on hand, the firm has placed Palm’s cost at approximately $138 per unit to build the Pre. Now, we know iSuppli knows its stuff but we have to take issue with the fact that it reached this conclusion without actually, you know, having a Palm Pre on hand to analyze. Instead, iSuppli based the majority of its calculations on assumptions. Educated assumptions, yes, but assumptions none the less. Regardless, it’s safe to say that the firm is certainly in the right ballpark and the Pre will likely cost much less to build than the iPhone, which runs Apple about $174 per unit. Even if iSuppli’s numbers are 10 percent off on the low end, Palm is still looking at doubling down with each unit sold. Not bad, not bad at all.

Read

iSuppli is the authority when it comes to manufacturing cost estimates and the firms latest victim is Amazon. According to a new report following iSuppli’s teardown and analysis, the Kindle 2 costs about $185.49 to build. In other words, Amazon’s margin seemingly approaches a sky-high 50%. Of course iSuppli’s numbers do not include expenses such as distribution, marketing and whatever Amazon pays Sprint for unlimited access to its data network, but it’s no wonder Amazon is doing everything it can to lead incite an e-book revolution. Should owners feel shafted? We think not — any Kindle 2 owner will tell you that WhisperNet is a pure joy. Just tell yourself Amazon’s seemingly huge profit margin is your WhisperNet subscription fee. If you own your Kindle 2 for 18 months before upgrading, WhisperNet comes in under $10 per month. $10 beats any unlimited data plan we’ve ever heard of, that’s for sure. Hit the jump for iSuppli’s press release.

El Segundo, Calif., April. 22, 2009-Amazon.com Inc.’s new Kindle 2 eBook carries $185.49 in materials and manufacturing costs, according to a dissection conducted by iSuppli Corp.’s Teardown Analysis Service.

The direct material cost of the Kindle 2, consisting of all parts used to make the product, amounts to $176.83. When adding in the conversion costs-i.e., manufacturing expenses and the battery-the total rises by $8.66 to $185.49.

The total materials and manufacturing costs reported in iSuppli’s teardown analysis of the Kindle 2 reflect only the costs for direct materials, manufacturing and basic tests. Not included in this analysis are costs above and beyond the material manufacturing of the core device itself-i.e., the cost of intellectual property, royalties and licensing fees; those not already included into the per component price-software, software loading and test, shipping, logistics marketing; and other channel costs. These costs are not included because teardowns cannot reveal this type of information.

The combined manufacturing and materials costs represent 51 percent of the Kindle 2′s $359 retail price.

The attached table presents a summary of the major cost drivers for the Kindle 2.

Black ink for E Ink
iSuppli estimates that $60, or 41.5 percent of the materials cost of the Kindle 2, is accounted for by the E Ink Corp. display module, which represents the centerpiece of the product.

“The showcase feature of the Kindle is its E-Ink display, which not only is easy on the eyes, but also employs electrophoretic bistable technology that allows it to show an image even when it’s not drawing power,” said Andrew Rassweiler, director and principal analyst, teardown services, for iSuppli.

“The new version of the E Ink display in the Kindle 2 supports 16-level grayscale images, rather than the 4-level version used in the previous-generation hardware. This makes the Kindle 2′s display look like a printed page.”

Rassweiler noted that the bistable display for the Kindle 2 obtained by iSuppli continues to display the warning message “Critical Battery” even after the product was completely dissembled for the teardown. With no power or electronic control to refresh the image, the display will be frozen in this state forever.

Kindle 2 takes turnkey wireless approach
After the display, the next largest cost driver in the Kindle 2 is the wireless broadband module, provided by Novatel Wireless Inc. Priced at $39.50, the module accounts for 27.3 percent of the materials cost of the Kindle 2. The module supports the CDMA2000 1X EV-DO Rev A air standard.

In the first-generation Kindle, the wireless functionality was provided by an integrated chipset that was an integral part of the main printed circuit board. In the second-generation Kindle, the wireless functionality has been divorced from the core design and instead uses Novatel’s turnkey module.

The use of a standard module like this makes the Kindle 2 easier to design. Furthermore, since Novatel manufactures many different wireless modules, it buys components in high volume, which represents leverage it can use to negotiate prices down with suppliers such as Qualcomm Inc., whose device represents the integrated circuit core of the wireless module.

Qualcomm Inc.’s MSM6801A single-chip baseband processor is priced at $13.18, iSuppli estimates.
The wireless connection runs behind the scenes, providing an always-on invisible link to Amazon’s library of electronic book content.

Another key element of the Kindle is Freescale Semiconductor Inc.’s MCIMX31LVKN5C multimedia application processor, priced at $8.64. The Freescale processor is based on an ARM11 microcontroller core, which runs at a clock speed of 532MHz. Freescale also contributed its MC13783VK5 audio circuit and power-management IC.

Read

According to iSuppli, the cool cats that live to shed insight on the total dollar value of components in electronic devices, RIM’s BlackBerry Storm has about $203 worth of mediocrity jammed into its bulky frame. Want some specifics? $15 for the SurePress screen, $35 for the Qualcomm MSM7600 and $13 for the 3.2 megapixel shooter. $203 might not sound like too much, but it’s significantly more than the $169 of the Bold or the $174 of the iPhone 3G when you consider how many of these things are being churned out. Now we’re not too sure how these three phones would rank if we were to include the money spent on R&D, shipping, packaging, training, patents, etc, etc, into the costs of each handset, but we’re willing to wager that the Storm would be a pretty strong candidate for number one given that RIM shifted its entire focus this year from the Bold to the Storm and has spent vast sums of money on advertising and lavish launch parties. The silver lining? As time goes on RIM will be able to save a lot in production costs considering how many Storms were (allegedly) returned in the infancy of its life cycle thus giving them a vast supply of refurbs. And cue iPhone vs Storm nerd fight part MCCXLIV in the comments.

Read