Tablet Sales Start to Slow

Tablet sales are expected to slow to just 14 percent growth in 2014, according to telecom analysts CCS Insight. Following year-on-year growth of 79 percent in 2012 and 71 percent in 2013, CCS Insight has calculated that sales in Western Europe are going backwards by 6 percent.

The analyst group’s latest global tablet forecast, published today, attributes this period of reduced tablet adoption to a combination of a slowdown in developed markets and delayed adoption in emerging markets.

The tablet market owes its success to Apple’s market-making role when it shipped the first iPad in April 2010. By the end of 2013 there were almost 390 million tablets in use worldwide, the majority using Apple’s iOS or Google’s Android operating systems.

“Rapid growth has proved unsustainable.”said CCS Insight’s Director of Forecasting Marina Koytcheva. “After the fastest adoption ever seen for a technology device, tablet-makers now face a nasty sting in the tail. Replacement rates are lagging those seen for smartphones, with consumers holding onto their tablets for three years or more.”
CCS Insight attributes this extended replacement cycle to several factors including robust design, solid state disks (which have proved more reliable than their hard-drive predecessors), durable batteries and regular software updates.

“With households seeing no necessity to replace their current tablets (or smartphones) there could be an uptick in replacement purchases of ageing PCs and notebooks” continued CCS Insight’s Koytcheva. “In some cases a household gadget budget might now be spent on new products such as the latest crop of wearable devices, including smartwatches and fitness bands. These are ideally suited to the lucrative fourth-quarter gifting market.”

To date about one in every four tablets sold has been in emerging markets; adoption there lags significantly behind the advanced Western markets. CCS Insight believes this can be attributed to the fact that these markets are still in the process of mass transition from feature phones to smartphones, and consumers are still excited about getting their first smart devices.

“Affordability constraints mean that it will be another couple of years before we start seeing strong uptake of tablets in countries like China and India where widespread ownership of both a smartphone and tablet is currently a step too far” said Koytcheva.

However, despite a pessimistic outlook for 2014, the forecast predicts a new chapter of growth will re-emerge in coming years. Replacement sales will start to kick in in developed markets and the first wave of growth will commence in emerging markets, with sales expected to reach 562 million units in 2018, representing a market value of $99 billion.

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David Dungay

Editor - Comms Business Magazine