This Week in Tablets: 6 Things we've learned from the most recent disappointing tablet sales figures

by George Jones

August 10 2013

George is a founding editor of TabTimes and a chief consultant at Hit Detection

The most recent numbers for tablet sales aren’t pretty. What does this mean for the rest of 2013?

Sorry to disappoint you, tablet evangelists, but the tablet revolution is now over.

Based on analyst reports earlier this week, it appears that tablet sales have outright stalled, based on an almost 10% drop in Q2 2013 sales vs. the first quarter of this year.

That’s not good, right? This rapid a stall means the market is over-saturated. Right?

Wrong. First, tablet sales are up 60% for the same period year over year. Unless you’re talking collectibles or inflated commodities, 60% YOY growth for new tech isn’t going to stall out so fast.

Second, if the world doesn’t continue to adopt tablets, what else are they going to buy? Laptops? Not likely. Sales for portable computing devices continue to drop, by the way.

All this said, this kind of drop does beg the question: What is going on here? Why are tablet sales slowing down? Why Q2?

Not surprisingly, everyone is pointing at Apple, and rightly so. No new iPad releases or announcements thus far in 2013 means no springtime surge of people buying the new iPad.

As easy as it is to blame Apple for the lackluster numbers—the company’s shipments dropped from 19.5 million to 14.5 million units, according to IDC—Samsung’s and Asus’s numbers are also down. Samsung sold 8.1 million units versus 8.6 million in Q1 2013. Asus sold 2.0 million units versus 2.6 million during the same period.

My take? In addition to waiting for Apple, consumers are waiting for everyone else as well, with the hopes that some kind of awesome new tablet(s) are announced towards the end of the year.

This could hurt Apple as much as it could help it. If, for some reason, Apple misses the mark with its next tablet announcement—whatever it is—this pent-up demand could easily flow in another, more Android-oriented direction.

A few more consequences regarding these lower-than-expected Q2 numbers also come to mind:

Apple will be forced to cut prices in the near future

As ComputerWorld’s Gregg Keizer pointed out a few weeks ago, the price of the iPad has been steadily dropping for almost three years now, thanks to the reduced pricing of older models as well as the lower price of the iPad Mini.

In order to remain competitive amidst weakening demand, the company will have to be even more aggressive. The day and age of $700 10-inch tablets and $400 7-inch devices is rapidly coming to an end, thanks to the aggressive pricing of Samsung, Google, and everyone else.

Apple is still the sun

Regardless of the apparently waning demand of the iPad and the increasing competitiveness of Android tablets, the tablet universe—both hardware and app development—continues to revolve around Apple. The fact that everyone is pointing to Cupertino to explain the disappointing YOY sales figures very clearly demonstrates this.

The enterprise has yet to go all in

Every month, more and more big companies are committing to tablets, but we still haven’t seen full-scale adoption of the devices in the manner that most companies embrace desktops or laptops.

What’s interesting is how broader enterprise adoption will affect market share. As much as people like the iPad, big corporations love Windows. Given the pending update to Windows 8.1, will this be enough to drive large-scale Windows tablet adoption in the second half of 2013 and beyond?

It will almost certainly drive some level of increase in Windows market share—we’re already seeing this on a semi-regular basis now. Forrester Research appears to agree with this sentiment. The research firm’s most recent report is predicting that not only will tablet sales total 381 million devices by 2017, but that 18% of all tablet purchases by that time will be made by enterprises.

The ranks of the top 5 tablet manufacturers isn’t completely baked

The most recent numbers, as TabTimes pointed out a few days ago, contain a few other surprises beyond the sales stall. Lenovo popped back into the top 5 for Q2 2013 with sales of about 1.5 million units. And Acer did as well, with 1.4 million units shipped.

Phablet sales will further cannibalize tablet shipments

It’s likely that some segment of consumers—particularly at the lower end of the price scale—could find that a larger-format phone/tablet hybrid like Samsung’s Galaxy Note performs capably enough that they don’t need a bigger device. It’s a big enough concern that mid-week, Digitimes reported that tablet manufacturers are worrying about such cannibalization.

This week’s loser: Tablet manufacturers

See above. Paint or explain it how you like, but an almost 10% quarter-to-quarter drop in device sales isn’t pretty for Apple, Samsung, or anyone else who lost ground.

This week’s winner: iPad-based retailers

Earlier this week, Heckler Design announced a pretty stylish-looking new iPad-compatible point of sale system that features an automatic cash drawer, compatibility with multiple currencies, and secure mounting.

Runner up this week: iWork users. I received an invitation early in the week to set up iWork—which includes Pages, Numbers, and Keynote—via my iCloud account. The end result is that I now have the ability to work on documents in this productivity suite in my Safari, Chrome, or Internet Explorer browser on my laptop.

George is a founding editor of TabTimes and a chief consultant at Hit Detection

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  • John Swain
    1 year 3 months ago

    Great article, well researched with addressing supporting issues. Q2 drop-off can be attributed to buyers waiting for Google's new Nexus 7 and Apples next generation of I pads.

    You are absolutely correct by calling the demise of the $400+ 7 inch tablet. Hisense is pushing a reasonably equipped sub $100 tablet that is sure to set fire among student users. Subsequently, volume numbers of tablet sales will increase but revenue will decrease and declining price points will squeeze the bloated "Microsaurus" RT into extinction.

    Your analysis of phablets cannibalizing higher priced tablets is very astute. As Sony, HTC, Samsung and LG fight for phablet dominance, all priced in the $500 plus price range, 7 inch i- pad minis do not make sense when 6 inch phones, with near full computing power, have better screen ppi and an easier "TIWY" (take it with you) ability.

    Everyone needs a phone with them at all times, or at least it seems that way, but tablets are usually left behind despite the fact people would like to take it along. Phablets solve that problem with a slight compromise in size.

    Manufacturers have already realized that profits have not shrunk in the upper phablet market, but has actually widened in comparison to all other devices, laptops, phones, and tablets included.

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