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TMCnet Feature

September 02, 2014

Tablet Market Forecast is Slashed Again


The tablet market is growing a lot more slowly than originally expected, according to researchers at International Data Corporation, which have made two significant reductions in sales forecasts over the last two quarters.

In the latest move, IDC lowered its worldwide tablet forecast for 2014 to 233.1 million units, representing a growth rate of 6.5 percent, down from the prior 12 percent, a reduction of about half.

In the forecast revised in May, IDC lowered the growth rate from 52 percent to 12 percent, a reduction of more than 400 percent.

In May 2014, for example, IDC lowered its forecast for tablet sales to 12 percent annual growth, from an earlier forecast of 52 percent.

IDC says two different trends are at work. “First, consumers are keeping their tablets, especially higher-cost models from major vendors, far longer than originally anticipated,” IDC said. That means the replacement cycle often seen in the smartphone market, where consumers upgrade every two years or so, does not seem to be as prevalent in the tablet market.

"Second, the rise of phablets -- smartphones with 5.5-inch and larger screens -- are causing many people to second-guess tablet purchases, as the larger screens on these phones are often adequate for tasks once reserved for tablets," IDC said.

Sales in North America and Western Europe will be flat in 2014, while the remaining regional markets will generate 12 percent unit growth over the same period.

The extent to which larger-screen smartphone devices are cannibalizing sales of tablets is unclear, but possibly quite important.

But it might be instructive that sales of voice-enabled tablets able to use the mobile network reached 25 percent of total in the Asia/Pacific (excluding Japan) region in the latest quarter.

That represents annual growth of 60 percent, which suggests many end users in this region are looking for a single device that can meet their needs in terms of voice communication and media consumption.

For some, that single device is a tablet and not a smartphone. For others, a smartphone with a larger screen might provide the same functionality.

In other words, in some markets, smartphones might be cannibalizing tablets, while in other markets tablets are cannibalizing smartphones.

 

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