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Worldwide Media Tablet and eReader Market Update

Worldwide media tablet shipments rose by 88.9 percent on a sequential basis and 303.8 percent year over year in the second calendar quarter of 2011 (2Q11) to 13.6 million units, according to the latest market study by International Data Corporation (IDC).

Based on this strong performance and an improved outlook for the second half of the year, IDC raised its shipment forecast for 2011 to 62.5 million units -- up from a previous projection of 53.5 million units.

Shipments in the second quarter were driven by continued robust demand for the Apple iPad 2 -- which saw shipments reach 9.3 million units, representing a 68.3 percent share of the worldwide market (up from 65.7 percent the previous quarter).

Research in Motion entered the media tablet market in 2Q11 with its PlayBook product, taking a 4.9 percent share of the market. Android-based media tablets share decreased to 26.8 percent, down from 34.0 percent the previous quarter.

Looking forward to the second half of 2011, IDC expects Android to cede additional market share in 3Q11 (dropping to 23 percent) before it starts growing its share again in 4Q11 (increasing to 25.9 percent) and beyond.

"Media tablet shipments grew at a solid pace in the second quarter, led by continued strong demand for Apple products," said Tom Mainelli, research director, Mobile Connected Devices at IDC. "We expect shipment totals to continue to grow in the third and fourth quarter, as additional vendors introduce more price-competitive Android products into the market and Apple works to maintain its dominance in the category."

Apple's iOS share will continue to lead by more than 40 percentage points over Google's Android for the remainder of the year, but IDC expects this gap to decrease substantially by the end of our forecast in 2015.

Turning to eReaders, the second quarter experienced a seasonal dip, down 9 percent sequentially to 5.4 million units, while year-over-year growth was 167 percent.

Amazon led the market with a 51.7 percent share, followed by Barnes & Noble with 21.2 percent. With product refreshes and following strong 2Q11 sales, IDC expects eReader shipments to grow significantly through the holiday season, reaching a total of 27.0 million units for the year -- up from a previous projection of 16.2 million units.

"We expect major vendors to offer their current-generation black-and-white eReaders for less than $100 by the holidays," Mainelli said. "We're also expecting Amazon's much-rumored, color LCD-based device to ship later this year. Because we expect it to run a customized version of Android that ties its use to Amazon's content services, we expect the device to more closely resemble Barnes & Noble's Color Nook than Apple's iPad 2. As a result, our current plan is to count it as an eReader, and that will also help drive shipment numbers."

eReaders are also gaining traction with a combination of increasing function and affordability, as well as greater device and content availability. The strong first half performance and an improved view of eReader positioning helped boost the outlook for shipment volume.

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