IDC drops tablet sales forecast, sees phablets encroaching on the market

Further slowing sales: Owners are keeping their tablets longer -- up to 3.5 years

IDC has lowered its forecast for tablet sales for 2014 by 6.3%, pointing to the cannibalization of small tablets by larger smartphones known as "phablets."

IDC lowered its forecast for tablet sales for all of 2014 today by 6.3%, pointing to the cannibalization of small tablets by larger smartphones known as "phablets" -- those with displays of over 5.5-inches.

Also, there's evidence that consumers are keeping their existing tablets much longer than originally predicted, IDC said.

IDC's original tablet forecast for the full year expected sales totalling 260.9 million tablets, including 2-in-1 tablet-laptops; IDC has now reduced that number to 245.4 million tablets.

Tablet shipments will still increase compared to last year by 12.1%, IDC said, but that's far below the 51.8% growth in 2013 over the prior year.

Phablets made up 10.5% of all smartphone shipments in the first quarter of 2014, or about 30.1 million shipped. That's more than double the 4.3% share of smartphone sales phablets had in the first quarter of 2013.

The emergence of phablets has caused customers to "second-guess tablet purchases as the larger screens on these phones are adequate for tasks once reserved for tablets," Tom Mainelli, an IDC analyst, said in a statement.

He noted that consumers are keeping their current tablets, especially more expensive models like recent 9.7-in. iPads and the iPad Air, for "far longer than originally anticipated."

Mainelli added via email: "A $500 iPad tends to have a longer lifetime than an $80 Android tablet."

IDC analyst Jitesh Ubrani said via email that while some consumers were expected to replace an older tablet after perhaps two years, "in some cases, we're seeing [tablets kept for] three to 3.5 years."

If a family does buy a second tablet, the original one is kept in use by another member of the family, Mainelli said. "We've found that a huge percentage of people who buy a new tablet go on to hand down their existing tablet to someone else in their household so that a three-year-old device doesn't get recycled out of the installed base," he said. "Instead, it starts a new life with a new owner and all of this is impacting shipment growth."

Because of the negative impact of phablets on smaller tablets in the 7-in. to 8-in. range, IDC predicted greater buyer interest in larger tablets with displays of more than 8 inches, even some with 11-in. displays or larger, like the new 12-in. Surface Pro 3, a 2-in-1 device.

Vendors will welcome sales of larger tablets because their average selling prices can be 50% higher than sub-8-in. tablets, said Ubrani.

Microsoft also will benefit from this expected interest in larger tablets because of the Surface Pro 3 and a general interest in Windows-based devices with their ability to run work-based productivity software.

IDC has said that Windows-based tablets, now forecast to take 5% of the tablet market for all of 2014, should more than double to 10.4% in 2018. Tablets running iOS are forecast to top 30% in 2014 and drop to nearly 28% in 2018. Android tablets, forecast to reach 64.4% of the tablet market in 2014, should decline to about 62% in 2018, IDC said.

While tablets in the 7-in. to 8-in. range made up 55% of all tablets shipped in 2013, that percentage is expected to fall to 44.5% in 2018, IDC said. Tablets from 8 in. to 11-in. made up 44% of the market in 2013, and will climb to nearly 49% in 2018. The 11-in. and larger tablets were less than 1% of the market in 2013 and will grow to 6.6% of the market by 2018.

IDC expects Android tablets to dominate the market through 2018. (Graphic: IDC)

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

See more by Matt Hamblen on Computerworld.com.

Read more about tablets in Computerworld's Tablets Topic Center.

This story, "IDC drops tablet sales forecast, sees phablets encroaching on the market" was originally published by Computerworld.

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