Phablets eat small tablets alive, may push consumers towards larger screens

by Patrick Pierra

May 29 2014

IDC just lowered sales projections for tablets in 2014, but the tablet and app markets still have a bright future

Tablets sales will grow much, much slower in 2014 than they did last year.

Market research firm IDC revised its sales projections today and now forecasts that 245 million tablets will be shipped worldwide this year. While this would represent a healthy growth of 12% compared to 2013 sales, the growth was much higher last year, at 52%.

But this is not all bad news for tablet manufacturers -- at least, for the high-end ones.

IDC mentions two reasons for its lowered projections -- which cover a market segment that actually includes both “pure” tablets of all sizes, with no phone capabilities, and “2-in-1” computing devices, including tablet/laptop hybrids and convertibles.

First, consumers tend to keep their tablet "far longer than originally anticipated, especially higher-cost models from major vendors,” said IDC analyst Tom Mainelli in a statement. “And when they do buy a new one they are often passing their existing tablet off to another member of the family.”

Consumers may learn to love high-end tablets’ durability and be willing to pay a premium price when they do update their device.

Old tablets being recycled won’t help much tablet manufacturers, but the app market will benefit from sustained usage and wider access to new individual tablet owners in families.

The second reason for the tablet market slowdown is that tablets don’t include phablets.

"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," said Tom Mainelli.

Within smartphone sales, the market share of phablets has doubled over the last year, from 4.3% in Q1 2013 to 10.5% in Q1 2014.

The popularity of phablets is mostly impacting small-screen tablet sales, though.

For a full picture and all important stats, bookmark TabTimes’ State of the Tablet Market

IDC expects that consumers’ interest for large-screen devices will also help the tablet market rebound. “Products with larger screens —like Microsoft's new 2-in-1, the 12-inch Surface Pro 3— are expected to play a greater role in the market going forward”, IDC predicts.

IDC reflects this in its projections when segmenting the tablet market by screen size.

While small (less than 8 inch) devices were 55% of tablets sold last year and expected to be 51% this year, they would account for only 45% of sales in 2018. On the opposite end, sales for tablets with a screen of 11 inches of more would grow from less than 1% to almost 7% of the market from 2013 to 2018.

All these projections are for shipment unit figures. As large screen devices typically command a higher price than small screen devices, the revenue growth potential for manufacturers is still significant.

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