iPad Mini Keeps Apple No. 1 in Tablets

NEW YORK ( TheStreet) -- Apple ( AAPL) can thank exceptional demand for the iPad Mini for its continued dominance in the tablet market. However, its grasp is slipping, thanks to Android.

Technology research firm IDC released its latest research for the tablet market, which grew 142.4% year over year to 49.2 million units. Much of that was from Apple, which sold 19.5 million units in its second quarter, above IDC's forecast of 18.7 million units. That's good for 65.3% year-over-year growth, and part of the reason why Apple was able to beat earnings expectations.

Much of that outperformance can be attributed to the iPad Mini, which was announced in October 2012.

"Sustained demand for the iPad Mini and increasingly strong commercial shipments led to a better-than expected first quarter for Apple," said Tom Mainelli, research director, tablets at IDC, in a press release. Consumers clearly want Apple iPads, and the iPad Mini, which starts at $329, is seen as the best of both worlds. Consumers are increasingly moving toward smaller tablets, yet they want an Apple product. Perhaps that's why we've heard the rumors of an iPad Mini with Retina Display coming later this year.

Apple held 39.6% of the tablet market at the end of the first quarter 2013, but that's way down from last year, when it held 58.1% of the tablet market. Samsung is in second place, thanks to its marriage with Google ( GOOG) Android, but it's so far in the rearview mirror, with just 17.9% of the market. Samsung experienced 282.6% growth year over year, but it's from such a small base. ASUS also experienced strong growth, seeing a 350% rise in units to 2.7 million tablets sold in the first quarter, taking third place, thanks in large part to the Nexus 7 device.

Competitors like Microsoft ( MSFT) and Amazon ( AMZN), which many thought would put a dent in the Apple stranglehold on the tablet market, have done little, if anything, to change that trend. Amazon is still in fourth place, and didn't crack 2 million units sold, and Microsoft just made the top five last quarter.

Microsoft shipped nearly 900,000 units in the first quarter of 2013, according to IDC, but given the hype surrounding the Microsoft Surface that has to be considered something of a disappointment. Rumors of smaller Windows-based tablets may not help, given the largely disappointing consumer sentiment towards Windows 8.

" T he notion that this smaller tablets will be the saving grace is flawed. Clearly the market is moving toward smart 7-8 inch devices, but Microsoft's larger challenges center around consumer messaging and lower cost competition," said Ryan Reith, program manager for IDC's Mobility Tracker program.

It's clear Apple, vis-a-vis the iPad, is dominating the tablet market, both in unit sales, and market share. For how long is anybody's guess, but as long as consumers see the benefits of Apple's ecosystem and the beauty, elegance and ease of use of the iPad, it'll continue to outweigh the competition. And by a country mile.

-- Written by Chris Ciaccia in New York

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