Research firm IDC thinks the tablet market will grow in 2014 compared to 2013 but at a slower pace than it previously forecasted, with a maturing market, stabilizing prices and a decline in low-cost tablets all contributing to the weaker growth.
According to IDC, shipments of both tablets and 2-in-1 devices are forecast to grow 19.4 percent in 2014, down from a growth rate of 51.6 percent in 2013. IDC cut its 2014 growth forecast by 3.6 percent from its previous estimate, and now thinks there will be shipments of 260.9 million units worldwide in 2014.
IDC predicts slowing growth in tablets.
Stabilizing prices will be a factor in the weaker growth, IDC said, noting that over past two years average selling prices have fallen rapidly but that this appears to be slowing. In 2012, ASPs dropped by 18.3 percent from the previous year, and in 2013 prices fell another 14.6 percent. However, IDC thinks ASPs will only fall 3.6 percent in 2014, mostly because of the growth of higher-priced commercial or enterprise shipments and consumers shifting away from ultra-low-cost products.
"After years of strong growth, we expect the white-box tablet market to slow in 2014 as consumers move to higher-end devices that work better and last longer," IDC analyst Tom Mainelli said in a statement. "In mature markets, where many buyers have purchased higher-end products from market leaders, consumers are deciding that their current tablets are good enough for the way they use them. Few are feeling compelled to upgrade the same way they did in years past, and that's having an impact on growth rates."
Consumer purchases of tablets in many markets will slow down, IDC thinks, but commercial shipments will grow from 11 percent of all tablet sales in 2013 to 14 percent of all tablet sales in 2014. Much of the commercial and enterprise tablet market so far has been concentrated in verticals such as education, but going forward IDC expects tablets to continue to be sold to small, medium, and large businesses around the world, which IDC said is likely to benefit Microsoft's (NASDAQ:MSFT) Windows over time. However, Apple's (NASDAQ:AAPL) iPad and tablets running Google's (NASDAQ:GOOG) Android are going to remain dominant, IDC said.
In the U.S. market, more and more tablet users are actually using their devices with cellular connectivity, according to a recent separate research report. The number of tablets in the United States using an embedded cellular connection jumped 46 percent in 2013 to 10.4 million, up from 7.1 million in 2012, according to a report from NPD's Connected Intelligence Mobile Connectivity Report. Strikingly, that increase came despite the fact that sales of cellular-capable tablets actually declined from 16 percent of total tablet sales in 2012 to 12 percent in 2013, according to NPD's Retail Tracking Service.
NPD pinned the increase in the number of active cellular tablets on the fact that carriers have started offering more affordable tablet data plans. For a long period of time consumers who bought tablets with 3G or LTE connectivity simply were not activating those connections.
For more:
- see this IDC release
- see this WSJ article (sub. req.)
- see this Reuters article
- see this PCWorld article
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