The leadership of Apple Inc. (NASDAQ:AAPL) in the mobile device market will end in 2013. Smartphones and tablets powered by Google Inc (NASDAQ:GOOG)'s Android operating system will dominate the mobile market, according to the latest analysis released by the International Data Corporation (IDC).
Based on the study conducted the technology sector of the IDC, Apple Inc. (NASDAQ:AAPL)'s leadership in the tablet market will end for the first time since the introduction of the iPad. The market of the iPhone and iPad maker is projected to decline from 51 percent to 46 percent this year.
On the other hand, the market share of mobile devices powered by Google Inc (NASDAQ:GOOG)'s will increase from 41.5 percent to 48.6 percent. The report concluded that the fluctuation in the mobile market share is driven by the prevalence of the extreme popularity of smaller devices powered by the Android operating system.
In a press statement, IDC research analyst Jitesh Ubranim said, “One in every two tablets shipped this quarter was below 8 inches in screen size. In terms of shipments, we expect smaller tablets to continue growing in 2013 and beyond. Vendors are moving quickly to compete in this space as consumers realize that these small devices are often more ideal than larger tablets for their daily consumption habits."
Apple Inc. (NASDAQ:AAPL) noticed the trend, which prompted the tech giant to introduce the iPad Mini in 2012. However, the smaller tablet will likely to hurt the sales of the larger iPad rather than its competitors. Apple CEO Tim Cook previously stated that the iPad Mini is cannibalizing the iPad sales.
During the first quarter earnings report of Apple Inc. (NASDAQ:AAPL) Cook stated, "Our base philosophy is to never fear cannibalization. If we do, somebody else will just cannibalize it, and so we never fear it.” Cook believed that the tablet market will eventually take over the personal-computer market and theorized that the iPad sales will continue to grow maintaining Apple’s profitability.
Data from the IDC study supported Cook’s theory and estimated that tablet sales will increase to 190.9 million units while PC sales will decline to 345.8 million units. The research firm predicted that the sales of PC and tablets would be the same by 2017.
In the smartphone market, Apple Inc. (NASDAQ:AAPL) is also facing a strong competition particularly from Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930). The IDC previously reported that the market share of smartphones powered by the Android operating system is growing fast.
The decline of Apple's dominance in the mobile market is one of the major factors driving the stock price of the company to drop. As of this writing, the shares of Apple Inc. (NASDAQ:AAPL) are down by 1.81 percent to $429.73 per share.