IDC Projects Dip in Tablet Sales as Phablets, Wearables Kick In

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Barry Levine avatar

Customer Experience, Mobile,IDC Projects Dip in Tablet Sales as Phablets, Wearables Kick In
Is the boom in tablets being impacted by the growth in sales of larger smartphones and other devices? That is one of the questions raised following the release of a new report from the International Data Corporation (IDC) that lowers its tablet sales forecast for this year and beyond.

The decline is modest, going from a projected 229.3 million units to an estimated 227.4 million, which is still 57.7 percent higher than shipments in 2012. In addition, IDC still projects worldwide shipments by 2017 to reach nearly 407 million units.

Critical Second Half

But tablets are at a critical juncture point, when their rise could be blunted by the emergence of other kinds of mobile form factors, and by saturation in certain markets. IDC attributes market saturation, as well as the increased adoption of smartphones with five-inch and greater screens, as impacting the sale of tablets.

While the dip is currently very small and may not represent anything other than a more accurate estimation, it is conceivable the rise of so-called “phablets” that offer a smartphone with larger screen, plus the coming smartwatch wars, could pose a substantial challenge long-term to tablets' mobile functionality.

Tom Mainelli, Research Director for Tablets at IDC, said in a statement that, without major tablet-related product announcements in recent quarters, "the second half of the year now becomes even more critical for a tablet market that has traditionally seen its highest shipment volume occur during the holiday season."

Learning Opportunities

Market Shift

He added that IDC expects to see average selling prices drop as "more mainstream vendors utilize low-cost components to better compete with the white box tablet vendors," who have begun to get traction even though they "typically offer lower-quality products and poor customer experiences."

The markets where tablets have seen their best sales are also shifting. North America, Western Europe and Japan have been the strongest, but now IDC expects growth to slow in those markets and increase in Asia/Pacific (except for Japan), Latin America, Central and Eastern Europe, the Middle East and Africa. Those emerging markets are expected to grow from about 39 percent of the worldwide market last year to 51 percent in 2017, while the more mature markets will drop to 49 percent from nearly 61 percent over the same time.

Interestingly, for all the talk of tablet usage in businesses and education, IDC said that adoption in education and commercial markets like retail only accounted for 10 percent of all tablet sales last year, a figure that doubles but remains only a small portion of the total market by 2017. These stats, of course, do not account for purchases of tablets by consumers who bring-their-own-device to work.