NEW YORK — Although tablet sales are still rising, their heady rate of growth is expected to slow significantly especially as markets saturate in developed countries such as the US, according to International Data Corporation (IDC).
Tablet shipments worldwide hit 217.1 million units last year, up from 144.2 million units in 2012, a 50.6% rise. That's down from an annualized growth rate of 87.1% logged in the last quarter of 2012.
"It's becoming increasingly clear that markets such as the US are reaching high levels of consumer saturation and while emerging markets continue to show strong growth this has not been enough to sustain the dramatic worldwide growth rates of years past," said Tom Mainelli, a research director for tablets at IDC, in a statement.
"We expect commercial purchases of tablets to continue to accelerate in mature markets, but softness in the consumer segment -- brought about by high penetration rates and increased competition for the consumer dollar -- point to a more challenging environment for tablets in 2014 and beyond," Mainelli said.
"There are pretty clear signs that in some markets, like the US for example, you should expect the forecast numbers to go down in 2014," Manelli said in an interview with EE Times. "Apple in particular is beginning to experience problems associated with a saturated market."
The saturation is coming first among consumers who drove the market buying tablets to use at home and on the job. Now consumers are passing down their old tablets as they buy the latest models, just as they did years ago with PCs.
"It took many years in the PC market to see saturation which we’ve seen in the tablet market very rapidly," he said. "Going forward IT will buy more of the tablets used in business. It will still be primarily consumers using their own tablets at work but the number of IT buyers will go up," he added."
The top five companies -- Apple, Samsung, Asus, Lenovo, and Amazon -- accounted for two thirds of the tablet market in the fourth quarter of 2013. Amazon saw a 1.7% year-over-year decline in its shipments while Lenovo grew its tablet business by 325% year-over-year due to its position in emerging markets where tablets are growing at a higher rate.
"Lenovo’s access to the Chinese whitebox manufacturing infrastructure has helped it drive more low-priced tablet products into the market, growing its share from just 1.3% in the same quarter last year," said Jitesh Ubrani, research analyst for the worldwide quarterly tablet tracker at IDC, speaking in a statement. "The company's strength in emerging markets, and its increased market share in adjoining markets such as PCs and smartphones, makes it well positioned to see additional tablet gains in 2014," he added.
The leader of the pack, Apple, exemplifies the other end of the spectrum -- they do well in mature markets and are therefore at risk from market saturation. Apple shipped 26 million units in the fourth quarter of 2013, up from 14.1 million in the third quarter of 2014 and 22.9 million in the fourth quarter of 2012.
Apple’s market share for the last quarter grew to 33.8%, up from 29.7% in the third quarter yet down from 38.2% in the fourth quarter of 2012. Samsung maintained its second-place position due to its range of products and adoption by carriers in the US, IDC said. The Korean company claimed 18.8% of the market, thanks in large part to low-margin products and emerging markets, increasingly the source of long-term tablet growth.
— Zewde Yeraswork, Associate Editor, EE Times