iPads are cannibalized by 3X-5X cheaper Android tablets[1], not iPhone. People have bought iPhone because it costs upfront $200. That's a magic price. Above that price demand swiftly drops.
[1] According to Gartner, there were 68% more tablets sold in 2013 compared to 2012. Android’s share of the tablet market rise from 45.8% in 2012 to 61.9% in 2013 while Apple’s share has fallen from 52.8% all the way down to 36%.
I don't know who is buying all these tablets Gartner is reporting. Tablet traffic to my website (Alexa top 10K) has stagnated at under 10% for over a year now. Apple is not wrong to look at usage share rather than simply at units shipped. 78% of visits to my website from tablets in the last 30 days were from iPad.
I would be interested to see some market research that shows people replacing their iPad air with a $200 android tablet instead of an iPad air 2. I suspect it's more the case that iPads are not upgraded as often, also, for many, their phone (android or iPhone) can do many of the jobs of a tablet, so they don't even purchase a tablet for that purpose.
> People have bought iPhone because it costs upfront $200. That's a magic price. Above that price demand swiftly drops.
Is that so? I've always wondered what percentage of iPhones sold are the base storage tier. I certainly would never buy the base model, at least until they up it to 32GB.
[1] According to Gartner, there were 68% more tablets sold in 2013 compared to 2012. Android’s share of the tablet market rise from 45.8% in 2012 to 61.9% in 2013 while Apple’s share has fallen from 52.8% all the way down to 36%.
http://www.gartner.com/newsroom/id/2674215