September 12, 2013
As Tablets Look To Outsell PCs, Cheaper Devices Could Also Oust Apple’s Dominance
[ Watch the Video: Tablets Sales Are Set To Eclipse PC Sales ]
Michael Harper for redOrbit.com - Your Universe OnlineIn March, NPD’s Display Search claimed tablets could outsell PCs by the end of this year, becoming six times more popular than desktops by 2017.
Now IDC is providing some specifics, saying tablet sales will best those of PCs in the fourth quarter of 2013. While PCs -- including desktops and laptops -- will ship more units than tablets for the full year, IDC predicts this tide will turn by 2015, when tablet sales are expected to begin outselling PCs annually.
Fueled by high and growing tablet sales, the smart-connected device market is also on the rise and is expected to grow by 27.8 percent by the end of the year, still slightly lower than the 30.3 percent growth seen in 2012.
While tablet sales are on the rise, a huge part of the market increase is likely from smartphone sales, which are expected to breach the 1.4 billion unit mark in 2015, making up 69 percent of all smart-connected devices.
So, as tablet sales are highlighted in this new IDC report, analysts admit that smartphones continue to be the hot item in the smart-connected market.
However, as the tablet forecast continues to heat up, the current tablet leader may themselves be outpaced in the near future.
The new tablet market has been dominated — and some say reinvigorated — by Apple’s iPad; since its 2010 launch, the iPad has topped sales charts. However, this dominating trend may soon break if other tablet makers have anything to say about it.
A recent report from Canalys shows Apple is still selling more iPads than any other tablet maker, but the number of non-Apple branded tablets being sold in the world is steadily growing. The iPad accounts for 42.7 percent of worldwide tablet shipments, according to Canalys, but tablets from Samsung, Amazon, Lenovo, Acer and “others” account for 57.3 percent. Just one year ago the iPad held 71.2 percent.
The latest IDC report nearly predicts this downward slip in iPad shipments could be a long running trend unless Apple makes a cheaper iPad.
According to IDC research analyst Megha Saini, technology is simply moving too quickly for consumers who want to keep up with the latest devices. Even those who aren’t too concerned with having the latest and greatest will be carrying a near-antiquated device in just two years’ time. This kind of over-saturation could lead smart-connected device growth to slow dramatically in the next four years. While year-over-year growth ticks in at 10.6 percent at present, it could fall to as low as 3.1 percent in 2017.
More specifically, IDC believes that of a $622.4 billion pie, smartphones and tablets priced under $350 could make up a hefty $423.1 billion slice.
“Introducing new handsets and tablet devices at cheaper price points along with special initiatives like trade-in programs from Apple and BestBuy will accelerate the upgrade cycle and expand the total addressable market overnight,” said Saini in a statement.
Perhaps worse news for Apple, these new IDC predictions claim larger smartphones, known as "phablets," could become wildly popular devices, possibly even outpacing traditional tablet sales. These devices, which have 5-inch or larger screen sizes, are largely made by foreign companies such as Samsung.
Though Apple’s been rumored to be testing screens as large as six inches for a possible iPhone — well within phablet territory — Samsung and others have been pioneering this slice of the market for some time now.
Bob O’Donnell, IDC’s vice president of clients and displays, says phablet sales will start eating into the smaller tablet market, “contributing to a slower growth rate for tablets."
In other words, the parts of the market that IDC expect to grow are cheap smartphones larger than five inches and cheap tablets no smaller than nine inches. Should any of this prove true, and should Apple continue on its path of premium devices at a premium price, there could be rocky roads ahead for the Cupertino-based tech giant.