Fun With Numbers

if you want to write an article about the number two tablets, the only way to do it is to exclude the ipad.

Not at all. You can show, and write, exactly what you just said one sentence earlier: "The iPad has 90% market share, and the other companies split the remaining 10%, with five companies each taking 1 to 2 percent of the market."

What about that is so difficult for mortals to understand?

Even if you never mention Apple more than once, it's important, when (e.g.) pointing to the fact that HP has almost twice the share of unit sales as Motorola, to recognize that you're comparing a 2% share with a 1% share, not a 20% share with a 10% share. There's a big difference between 1% and 10%, both qualitative and quantitative. For example: Smaller numbers are closer to the noise level, and therefore more subject to fluctuation. 1% could really be 2%, and could easily jump to 2% in the next quarter, but it's unlikely that 10% is really 20%. And, lo and behold, this turns out to be relevant to this very case, because in fact HP's numbers have probably been goosed by a one-time money-losing giveaway of Touchpads. That's a fluctuation.

Gruber's article is a counterpoint on "PC manufacturers are dominant in the tablet space", and the idea that NPD were incorrectly attributing the "number 2" player to HP. Naturally the iPad comes into discussion (and yes it's smart to remove the iPad when trying to look at the rest of the market.) However NPD were publishing conclusions that aren't reasonable in light of the fact that the Kindle Fire and B&N Nook are selling very well in addition to the dominance of the iPad. By some reputable estimates the Nook is selling well in excess of HP. (To the tone of 15x the sales of HP.)

If you finish the piece, it matters because the resulting conclusions come from some sort of bizarro world. Right now the tablet game really comes down to Apple, Barnes & Noble and Amazon. (The Nook, which has sold literally orders of magnitude more units than the TouchPad, isn't even being counted.)

But the report wants to reassure PC manufacturers that, somehow, that they are still in the hunt.

From TFA:

"Including the iPad makes statements like this, from NPD, seem absurd:

PC manufacturers are dominant in the tablet space, as four of the top five tablet brands already have a strong U.S. consumer PC presence. Only two of the top five brands play in the smartphone market.

NPD is trying to paint a picture that there’s a contest going on where there is none. I repeat the following from their report:

76 percent of consumers who purchased a non-Apple tablet didn’t even consider the iPad, an indication that a large group of consumers are looking for alternatives, and an opportunity for the rest of the market to grow their business.

That’s one way to put it. Another way is that 92 percent of U.S. tablet buyers considered an iPad, and 89 percent bought an iPad, which means 97 percent of tablet buyers who merely considered an iPad bought an iPad, and if not for the 8 percent of tablet buyers who for whatever reason did not consider an iPad, none of these companies would have sold even 100,000 tablets over the first nine months of 2011."

In theory perhaps I should treat them the same, but the best analogy I can come up for this piece reads is something dramatic and ugly like "this article claims economic conditions in South America are improving, but check out how poor they are compared to the US!"

Apple is a US company, Samsung/HTC/Nokia/RIM/BLAH aren't. They market very well to US consumers, both their products and their brand. Also, Apple products tend to go on sale in the US first. Even if you cut it by half, the numbers are still embarrassing for everyone else.

Historically Apples international revenue has floated around 40% (i.e domestic at around 60% by revenue). In recent quarters these figures have reversed due to international iPhone penetration. (By revenue iPhone makes up around 43% of Apple's business with the iPad and Mac hardware roughly on par at 19%/20% respectively. iPhone significantly outsells all other business models by units and revenue.)

Apple's last quarterly results(Q4 2011) indicated 63% international revenue over all business units. Leaving 37% for domestic revenue.

Applying this figure directly indicates 4.11M sales alone in the last quarter, or 9.25M over the three quarters stated, which is reasonably consistent with Gruber's math.

If we keep in mind that the iPhone is skewing the revenue split to international purchases we can assert that 40% is indeed being conservative.

Reference: Apple Q4 2011 earnings call: http://www.macrumors.com/2011/10/18/apple-records-q4-2011-ea...

NPD claims that they sold ~120k tablets in the US through October. At around the same time (right around the Transformer Prime launch, I believe), ASUS claims they have sold 1.2 million total.

Given those two data points, you'd estimate that ASUS is selling 90% of their tablets outside the US. That being said, it wouldn't surprise me to find out that ASUS is strong in Asia and that was what was driving their non-US sales.

Gruber's point is obviously biased towards Apple but it doesn't lack truth or facts. NPD report is sketchy at best and gives a distorted view of the current scene, which is the opposite of what this kind of reports should do.

As for the marketshare it's interesting because so far what we are seeing is that the iPad is not behaving like the iPhone but more like the iPod. It makes sense, after all. The phone market its heavily subsidized and people choose phones based on carrier availability and special deals. A lot of the growth of Android can be attributed to 2x1 deals, middle range phones that are not used as smartphones and the lack of iPhone on Verizon and Sprint until recently. Im not saying that Android isn't a great OS or that Android phones can't be awesome and cutting edge -lots of them are-, just that when you analyze the Android growth you cannot discount these things.