How smartphones won the tablet war

More insights into how smartphones are eating into the tablet market – from Apple and others.

You might think Apple’s financial results wouldn’t mean that much for enterprise IT folks. For the most part you’d be right, but reading between the lines and connecting the dots can sometimes reveal stuff that matters far beyond the hushed halls of Apple’s Cupertino headquarters.

Last week, for example, Apple’s most recent quarterly results indicated a bit of important news: iPad sales have stopped growing. In fact, they’ve actually been shrinking

How is that even possible? Apple still dominates tablet market share, and tablets are still killing the PC – which continues its free fall.

What role do tablets play?

Regular readers of TechWatch (thanks again, Mom), may not be surprised at what I think is happening here. A couple months ago I asked, Is the tablet era already coming to an end?, and Apple’s latest results seem to shovel a bit more dirt on the tablet market’s grave. I’ve also gone on record as a huge "phablet phan," and I it seems clear that the rise of the phablet is seriously eating into the tablet market.

To put the situation in typical blog hyperbole: PCs are still dead. Tablets are now dead too. Smartphones – especially big-screen smartphones and phablets – are proving to be the last devices standing.

Just as tablets can now do more and more of what you used to need a PC for, big-screen smartphones are increasingly taking over the functions that seemed to call for a tablet. That’s true even when you’re talking about a 4-inch iPhone and a 9.7-inch iPad. But it’s way more true as phones get bigger and tablets get smaller. When you compare 5-inch or 6-inch smartphones or phablets with a 7-inch Android tablet, there doesn’t seem like much of a difference. Sometimes I wonder why Apple doesn’t just build a phone into the iPad Mini and call it an iPhablet?

Smartphones get special advantages

There are other factors in play, as well. For one thing, in the U.S., wireless carriers still subsidize smartphone purchases, making it easy and affordable for users to upgrade every year or two. In fact, many carriers have come up with plans designed to bury the upfront cost of the phone to entice users to upgrade even more often. That simply doesn’t happen in the tablet or PC markets.

Just as importantly, innovation in those categories seems to have slowed (sorry, Windows 8), while smartphone and phablet features and form factors continue to evolve rapidly. Sure, some commentators complain that the latest smartphones are getting more same-old, same-old, but compared to PCs they’re changing faster than HP CEOs.

Then there’s the social issue. Smartphones get carted everywhere, and people are often judged on the device they carry the same way they get judged on the clothes they wear and the car they drive. It may not be very nice, but it definitely happens, encouraging many people to continuously upgrade their phones to the sexiest models. PCs and tablets, by contrast, are mostly used at home and in the office, so there’s less pressure to have the latest and greatest.

Finally, because phones go everywhere their owner goes, they experience more wear and tear and they’re more vulnerable to loss and accidental damage, sometimes requiring users to buy a new device.

Add it all up and you get a world where smartphones are fashion accessories as much as productivity and communication devices, subject to constant replacement and upgrades for a wide variety of reasons. That constant churn increases the incentives for smartphone innovation, creating even more reasons to buy a new device. Tablets and especially PCs, by contrast, are seen as more utilitarian objects, and get replaced only when necessary.

That’s a perfect recipe for smartphone dominance and the "death" of PCs and tablets.

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