Smaller Tablets Are the Bigger Investment for 2013: Amazon.com, Inc. (AMZN), Google Inc (GOOG) and More

The tablet market is already red-hot and poised for more growth, but it’s smaller tablets that are likely to grow in popularity this year. Investors interested in in mobile tech should take note of this trend.

Smaller is the new bigger
The shift from desktop to mobile has been clear for quite a while now, and many predict that this is the year global installed base units of mobile devices will outnumber desktop computers.

Source: KPCB.

In the tablet space, Apple Inc. (NASDAQ:AAPL) and Android rule the roost, and Microsoft Corporation (NASDAQ:MSFT)‘s Windows 8 tablet OS trails far behind. Just a mere two years ago, Apple Inc. (NASDAQ:AAPL) was riding the tablet market share like a show pony, with a whopping 90% market share, but over the past three years Apple’s share has slipped to 43.6% because of Android’s dizzying worldwide expansion.

The Android-based device market share breaks down as follows:

Source: Localytics.

Amazon.com, Inc. (NASDAQ:AMZN) (NASDAQ:AMZN)‘s Kindle dominates the Android market, with the Barnes & Noble, Inc. (NYSE:BKS)‘s Nook following in a distant second, Samsung’s Galaxy in third, and Google Inc (NASDAQ:GOOG)‘s Nexus nabbing the fourth spot.

Apple’s market wasn’t just stolen away by the prevalence of Android tablets, but also by the cheaper and smaller offerings of those Android devices. Some believe tablets like the Nexus 7 and Kindle Fire forced Apple Inc. (NASDAQ:AAPL) to enter the smaller tablet game months ago — a move that helped save Apple’s small tablet future.

A report by DisplaySearch showed that shipments of 9.7-inch tablets (original iPad size) fell by more than 6 million from December 2012 to January 2013. At the same time, small tablets measuring 7- to 9-inches increased from 12 million to 14 million. Last year, 160 million tablets were shipped worldwide and that number is estimated to increase to a whopping 254 million this year. The chart below shows tablet sales from last year and projected sales for this year, along with 2013 estimates for small versus large tablet shipments.