A baby-boom of tablets overwhelmed the market a few years ago and consumers went nuts for it! Unfortunately for OEMs, the market seems to be maturing and consumers are utilizing more smartphone-like devices.
So, what’s with the tablet cool-down?
#1 Unknown buying habits
In 2010 when the tablet craze kicked off, OEMs were overjoyed with the shipment numbers. According to IDC, 10.1 million media tablets were shipped in the fourth quarter, which was more than double the 4.5 million shipped in the third quarter. However, within these short four years, tech leaders, including Apple, have seen secession in tablet shipments. Released in April, Apple only sold 16.3 million iPads in the first quarter, down from 26 million over the holiday quarter.
Consumers learned early exactly what tablets were capable of and saw no immediate need to upgrade to a new model, unlike smartphones, which have a lifespan of about 12-18 months. Consumers with two and three-year-old iPads or similar products are still very content with what they have. While PCs are now refreshed every 4-5 years, it is not yet clear what that refresh cycle is for tablets.
#2 Easy to share
Tablets are highly shareable devices, especially in households where families can’t justify a need for a plethora of tablets when each member already possesses a smartphone. It’s very common to see families sharing one or two tablets and they don’t seem to be in a huge rush to upgrade.
#3 Smartphones do it all – for now
Anything a tablet can do a smartphone can do – but probably more conveniently.
As screens on smartphones have been getting larger, consumers are realizing this device has most of the same features and can perform many of the same tasks a tablet can, particularly a phone with a 5- or 6-inch screen. Although the line blurs between smartphones and phablets, this doesn’t necessarily mean consumers won’t buy a tablet, but they seem to be scaling back on how much they are willing to pay for a new model.
Emerging market potential
Currently, the smartphone rules the digital world. However, emerging markets who will never click a mouse or feel the burn of an overheated laptop show potential interest in phablets and tablets. For this market, smartphones seem to be a simple training device introducing the world of computing. As these consumers progress, they will eventually want more power from larger devices; similar to the Nokia 3310, more commonly known as the brick phone, served as a pathway to a cheap laptop in the past.
We are also seeing real interest for tablets that CIOs can fit into their IT programs. These devices deliver more processing power and a bigger screen that let users do more. Luckily for OEMs, IT managers don’t buy cheap tablets. They are still willing to buy large screen tablets in the $600 price range. Top OEMs should tread lightly as competition looms in this category.
While the tablet’s fifteen minutes of fame isn’t over yet, consumers are playing the game better than manufacturers. Until buying habits are established and OEMs can find where innovation meets price, we will probably just get to the point where tablets will sell around 400+ million per year steadily in the future. The smartphone continues to reign supreme.