Due to Q1 2014 declines in demand for tablets and 2-in-1 devices, IT research firm IDC is lowering its previous forecast for tablet shipments this year. According to the latest figures, IDC has readjusted its estimated tablet and 2-in-1 shipment forecast to 245.4 million, down from the previous 260.9 million units predicted earlier this year. The decline is being attributed to consumers holding onto their devices for longer as well as the rise of large-sized “phablet” smartphones on the market.
While the prospect of more than 245 million tablets sent to market this year is certainly nothing to sneeze at, IDC’s latest forecast represents a massive drop in expected year-over-year shipped from last year. In 2013, the company predicted a massive 51.8 percent year-over-year growth in the tablet market, but in 2014 that number fell to a modest 12.1 percent. Like the smartphone market and the laptop markets before it, it seems the tablet market is reaching its saturation point, where consumers are happy enough with their current devices that they don’t feel pressured to dig into their pocketbooks for new ones.
"Two major issues are causing the tablet market to slow down. First, consumers are keeping their tablets, especially higher-cost models from major vendors, far longer than originally anticipated. And when they do buy a new one they are often passing their existing tablet off to another member of the family," said Tom Mainelli, program vice president, Devices & Displays at IDC, in a prepared statement. "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."
According to IDC, the phablet share of smartphone shipments has more than doubled this year, with an estimated 4.3 percent of phones fitting the bill for phablet status in the first quarter of 2013 up to 10.5 percent for the same period this year, meaning a whopping 30.1 million units in Q1 2014 had screens larger than 5.5 inches. With devices such as the Nokia Lumia 1520 and the recently announced LG G3 becoming the norm, it seems many customers just don’t see the value in purchasing both a smartphone and a tablet when their jumbo-sized phone can easily handle tasks previously reserved for slates.
But the news isn’t all gloom and doom: IDC expects the market will self-adjust toward larger-screen devices (we’re looking at you, Surface Pro 3) as consumers continue to crave bigger and better displays on their devices. And since larger screens normally mean larger price tags, bigger might certainly be better for both sellers and customers alike.
"The shift back toward larger screens will mark a welcome sea change for most vendors as the average selling price for these devices will remain roughly 50 percent higher than the average sub-8-inch device," said Jitesh Ubrani, research analyst, Worldwide Quarterly Tablet Tracker. "Microsoft is also expected to benefit from this shift as the share for Windows-based devices is expected to double between now and 2018."
Even if predicted shipments are decreasing, its really too soon to panic just yet—earlier this month, IDC found that major tablet manufacturers, which include Microsoft (MSFT) and Samsung, continue to gain market share despite less-than-perfect sales predictions, meaning there is still some fight left in the traditional tablet market.