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Computerworld - Large smartphones with 5-in. or larger displays -- often called phablets -- are eating into sales of smaller tablets with screens in the 7-in. range.
The phablet cannibalization trend is so significant that IDC lowered its long-term tablet forecast. The research firm slightly lowered its previous 2013 forecast from 227.4 million tablet shipments worldwide to 221.3 million.
Samsung's large Galaxy Mega smartphone has a 6.3-in. screen. (Photo: Samsung)
IDC lowered its 2017 tablet forecast even further, pegging shipments at 386.3 million, down from the previous 407 million units.
In some markets, especially the Asia Pacific region, consumers have already decided to buy a large smartphone rather than a small tablet, IDC analysts said. Tablet purchases in South Korea have declined while larger smartphone purchases have increased. IDC researchers there are forecasting that 2013 tablet shipments will drop below 2012's figures.
"Korea is a unique case, but it could very well be the precursor to that happening in more countries and regions," said Tom Mainelli, an IDC analyst.
"People in some countries have limited money to spend, so they tend to go for a large phone because they can call and browse on it and read email, as opposed to getting a small phone and a tablet," added IDC analyst Jitesh Ubrani. The phablet becomes the "jack of all trades."
The cannibalization of tablets is less of a concern in the U.S. and Canada where expendable income is more available. In North America, analysts are more worried about market saturation, with tablets bought up in huge numbers going back to 2010. The market is set to turn from high growth to "mostly a replacement market," Mainelli said.
IDC also found that tablets in emerging countries aren't as popular as phablets because there is less Wi-Fi at home and less traditional home PC usage. "We think many of those cheap whitebox tablets being used in emerging markets are essentially replacing DVD players, with the content side-loaded onto them from various sources," Mainelli said. "Also, larger smartphones took off there first."
In addition to large smartphones' cutting into tablet sales, Mainelli said IDC believes that wearable devices and other new computing categories will temper tablet growth in coming years. He didn't estimate by how much, however.
As large phone use rises, Mainelli said it's possible that the tablet market will shift back to larger tablets in a reversal of the recent trend toward sub-8-in. tablets. "I tend to think that is what will happen in the U.S.," he said. One example is the new iPad Air, with a 9.7-in. display.
IDC predicts about 220 million tablets with screens that are under 8 inches will ship globally in 2017, with another 145 million tablets shipping that are between 8 inches and 11 inches, and about 20 million with screen sizes of more than 11 inches.
Analyst firm Canalys said in November that phablets larger than 5 inches accounted for 22% of all smartphones shipped in the third quarter.
Originally published on www.computerworld.com. Click here to read the original story.