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March 07, 2014

Tablet Market is Slowing

The global market for new tablets will grow at about a 19 percent rate in 2014, slowing from the 52 percent pace of 2013, according to International Data Corporation (IDC), representing sales of about 261 million units globally.

IDC earlier had projected global sales would slow to single-digit percentages and shipments will peak at 386.3 million units.

One complicating factor is competition from large-screen smart phones, which might cannibalize smaller screen tablets, which have been on a sales upswing over the last couple of years. IDC suspects growing functionality of the larger-screen smartphones will, in turn, cannibalize sales of smaller screen tablets, possibly shifting demand towards bigger-screen tablets.

In developed markets, tablet saturation is a bigger issue, as much of the market shifts to “replacement” mode, IDC suggests.

In 2012, average tablet selling prices declined 18 percent from 2011 levels, and in 2013 prices dropped another 15 percent, IDC says.

Price erosion has started to slowly bottom out, with average selling prices forecast to drop a modest four percent in 2014, based on a predicted shift to higher-priced, larger-screen devices.

Also, innovations in the tablet space have not been so pronounced that existing users feel compelled to upgrade, and that likewise is slowing sales growth.

Still, tablets might represent half of sales in the broader PC market according to Canalys. Tablets will represent almost 50 percent of the total PC market (desktops, notebooks, and tablets) globally in 2014.

Tablet PC shipments accounted for 40 percent of PC shipments in the third quarter of 2013, Canalys says.

Canalys predicts 285 million tablets will be sold in 2014, growing to 396 million units in 2017.

According to the NPD DisplaySearch, global tablet shipments will rise to 315 million in 2014, comprising more than 65 percent of sales.

By 2017 tablet PC shipments will climb to 455 million, encompassing nearly 75 percent of the mobile PC market, NPD says.

Edited by Rory J. Thompson

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