Does Apple finally have a tablet battle on it hands?

Global sales of the iPad fell in Q3 to 67% from 96% a year ago as the Kindle Fire looms

After thoroughly dominating the tablet market since the debut of the iPad in April 2010, Apple is losing significant global market share to Android-based devices, according to a research firm's data from the third quarter.

Make no mistake: Apple's iPad still dominates the world market with 67% of global tablet sales in Q3, said Strategy Analytics. But that's down from 96% in the third quarter of 2010, when competitors were just beginning to introduce rival products.

(Also see: iPad, meet your first serious competition and Apple firing back at Kindle Fire?)

Still, 67% is considerably less than the 75% to 80% routinely cited as the iPad's current market share.

Meanwhile, tablet computers running on Google's Android OS grabbed 27% of global sales in Q3, more than 10 times the 2.3% from the year-ago quarter, Strategy Analytics reported.

Overall, 16.7 million tablets were sold in Q3, Strategy Analytics said, almost four times the 4.4 million sold in last year's third quarter.

From Bloomberg:

Companies from Samsung to Acer Inc. are counting on Android, the most popular operating system for mobile phones, to help dent Apple’s dominance in the surging tablet market. Competition between Android devices and the iPad may further intensify as Amazon.com joins in with a product at half the price of the Apple gadget, Strategy Analytics said.

“Amazon’s strategy of minimizing its hardware price is set to ignite the entry-level tablet segment and attract more mass-market consumers,” Neil Mawston, a London-based director for the research company, said in a statement.

Indeed it is. At $199, Amazon's Kindle Fire finally will give prospective tablet buyers a viable option in the low-end part of the market.

The mistake companies such as HP and Research in Motion have made is to price their devices comparably to the iPad. Faced with a decision between a highly regarded product (the iPad) and tablets garnering lukewarm to negative reviews (HP's TouchPad and RIM's BlackBerry PlayBook), the vast majority of buyers have been making the obvious and logical choice.

Which is why HP abandoned the TouchPad in less than two months, while the PlayBook has seen poor sales and eventually may suffer the same fate as the TouchPad. Even several price cuts for both devices failed to ignite consumer interest (I'm not counting the TouchPad's $99 going-out-of-business sale). Once consumer perceptions harden, they're difficult to change.

Those failures notwithstanding, Apple appears now to face some genuine competition as the Android tablet makers are making inroads and the Kindle Fire, which has garnered positive reviews, goes on sale Nov. 15, just in time for holiday shoppers.

Strategy Analytics estimates that Amazon could sell more than 15 million Kindle Fires over the next two years.

A more balanced tablet market can only be good for consumers, as competition breeds innovation, creativity and lower prices. In other words, better choices.

Game on.

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