Strong iPhone and iPad sales fueled Apple's (AAPL) latest stellar results, but rising competition from devices using Google's (GOOG) Android operating system could crimp Apple's growth in both fields this year.
In Q3 2010, Android-based smart phones for the first time surpassed Apple's iPhone in market share for new handset sales. And Google's Android is poised to do the same in tablet computers.
Apple had the media tablet market largely to itself this holiday season, when it sold 7.3 million iPads.
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Market research firm IDC says Apple has nearly 90% market share worldwide in media tablets. But that's likely to fall as tablets running the new Honeycomb version of Android hit the market soon.
One such product is Motorola Mobility's (MMI) Xoom tablet, which is due out this quarter.
Android is open-source software available to anyone, as opposed to the proprietary operating systems of Apple and others.
Apple Chief Operating Officer Tim Cook dismissed Android devices in Tuesday's conference call with analysts to discuss the company's fiscal first-quarter results.
Cook called Android tablets, such as Samsung's Galaxy Tab and Dell's (DELL) Streak, "scaled-up smart phones" because they don't run software optimized for tablets. Cook said these devices are "bizarre."
He also said future Android tablets, such as those unveiled at this month's Consumer Electronics Show, are just "vapor," because the makers haven't announced details like pricing and availability.
"We'll assess them as they come out," Cook said. "However, we're not sitting still. And we have a huge first-mover advantage. And we have an incredible user experience from iTunes to the App Store, and an enormous number of apps and a huge ecosystem. And so we're very, very confident with entering into a fight with anyone."
Apple is expected to unveil its second-generation iPad before July.
Besides Android, iPad will face competition this year from Research In Motion's (RIMM) BlackBerry PlayBook tablet and Hewlett-Packard's (HPQ) Palm WebOS tablet.
IDC expects global shipments of media tablets to jump 162% to 44.6 million units this year. It forecasts global shipments of 70.8 million units in 2012, up 59%.
"We are expecting Apple to stay at the forefront both in shipments and in technology innovation," said IDC analyst Susan Kevorkian. "We're expecting about 30% of this year's media tablet shipments to be Android-based. But keep in mind that it's 10 or more (Android) vendors vying for that piece of the pie."
Still, she wouldn't be surprised to see Apple's share of the tablet market dip to 50% in 2011. LINK
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