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Here’s how the growing tablet market is set to split in two

by Doug Drinkwater

June 25 2013

Apple's iPad mini has got buyers thinking differently about 'budget' tablets
Apple's iPad mini has got buyers thinking differently about 'budget' tablets

The tablet market continues to grow at high-speed but buyers are surprisingly starting to shun premium tablets in favor of more affordable models, according to the latest research report from Gartner.

In its second quarterly report into device adoption, Gartner forecasts that tablet shipments will rise 67.9% year-on-year to 202 million units in 2013, and expects this growth to coincide with a 10.6% fall in shipments for desktop and notebook PCs (down to 305 million units).

And with the mobile phone market also expected to grow a further 4.3% to a massive 1.82 billion shipped units this year, Gartner analyst Carolina Milanesi believes that consumers now demand “anytime-anywhere” computing.

“Consumers want anytime-anywhere computing that allows them to consume and create content with ease, but also share and access that content from a different portfolio of products,” said Milanesi, a research VP at Gartner.

“Mobility is paramount in both mature and emerging markets.”

Buyers shift from premium to budget tablets

This appetite for mobile products isn't confined to just tablets and smartphones -- Gartner also expects demand to hot up for Chromebooks, hybrid Windows 8 devices and high-end tablets like the iPad, especially as new upgraded models make their way to market.

Indeed, the researcher believes that the introduction of Intel's Bay Trail and Haswell processors as well as Windows 8.1 will spur this demand although analysts reckon the new models will have a bigger impact on company margins and average selling prices (ASPs) rather than overall sales figures.

One more thing that could impact both company margins and ASPs is Gartner's surprising insistence that premium tablets -- once a hotbed of activity with models from Apple, Samsung, Motorola, Toshiba and others -- are struggling to gain traction.

The research firm believes that consumers are starting to shift from premium to basic tablets -- something it puts down in part to the success of Apple’s iPad mini, which apparently accounted for 60% of iOS sales in the first quarter -- and sees a two-tier market coming into effect.

 “The increased availability of lower priced basic tablets, plus the value add shifting to software rather than hardware will result in the lifetimes of premium tablets extending as they remain active in the household for longer,” said Gartner research director Ranjit Atwal.

“We will also see consumer preferences split between basic tablets and ultramobile devices". The latter most likely refers to the increasingly popular hybrid tablets and Google Chromebooks.

Android wins for volume

Google's success doesn't stop there with Gartner pointing out Android as the most popular OS by volume, even if it did claim that Apple remains the leading cross-platform operating system.

Numerous market researchers have previously indicated that Android has overtaken iOS in the smartphone market with some others, including ABI Research, claiming that it is only a matter of time before the same thing happens in the tablet market.

Gartner though remains unconvinced and believes that Apple, Google and Microsoft are all facing the challenge of being relevant in each device category.

“Although the numbers seem to paint a clear picture of who the winner will be when it comes to operating systems in the device market the reality is that today ecosystem owners are challenged in having the same relevance in all segments,” said Milanesi.

“Apple is currently the more homogeneous presence across all device segments, while 90% of Android sales are currently in the mobile phone market and 85% of Microsoft sales are in the PC market.”

BYOD will be even bigger news in 2017

Gartner's study didn’t only look at which devices consumers are buying – it also looked at how the bring-your-own device (BYOD) tend continues to proliferate in enterprise.

Following on from Cisco's recent finding that BYOD can save enterprise time and money, Gartner forecasts that computing devices brought in by consumers will grow from 65% in 2013 to 72% by 2017, and says that this “signifies the growing importance of designing for the consumer inside the enterprise”.

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