Will tablets make a comeback in 2015…?

Tablets - Main Pic

Last year there was a lot of conjecture, and some evidence, that tablet sales were slowing. The sales figures from companies such as Apple and Samsung appear to reinforce the idea that tablets’ phenomenal growth has stagnated, but is this trend going to continue into 2015? Apple CEO Tim Cook called slowing iPad sales a “speed bump” in 2014, but is that really the case?

We already took a look at declining tablet sales back in October, but in this post we revisit the issue with a brief look at historical tablet sales and some observations about the state of the market going into 2015.

The rise and fall of tablets

Tablet computers, of which the iPad is the most well known and popular (in total sales since launch), might be a fairly recent phenomenon in terms of widespread appeal, but in fact they have been around in one form or another at least 20 years.

The tablet market today is dominated on the one hand by the iPad, and on the other various Android devices from Samsung, Google and others, and of course the Windows-based Surface from Microsoft – but where did they all come from?

Most people think of tablets as a new style of computing device, but their heritage extends quite far back to lots of different devices, all of which suffered a quick death in the pre-iPad era. There were some notable examples in the 1980’s, such as the pen-based PenCept PenPad 200 (1982) as well as more well known devices such as the IBM ThinkPad 700T (1992) and the Cyrix WebPAD (1998, link to Tom’s Hardware review) which garnered favourable comments like “WebPAD is a reference design for a product that will make Internet browsing real fun” and “This is how I see the future of computing…”

But it wasn’t until Apple reinvented the tablet as a modern, powerful multi-touch device in January 2010 that tablets broke into the mainstream. It seems quite a long time ago now, but here’s the original iPad from 2007:

Tablets - Apple iPad 1

Following the iPad’s successful launch and reception, dozens of companies launched similar products – such as the little-known Android-based Cisco Cius (June 2010), the BlackBerry PlayBook which ran the QNX operating system (September 2010) and the Panasonic Toughpad FZ-A1 (November 2011).

Google released the first generation Nexus 7 in June 2012, which was closely followed by Amazon’s Kindle Fire in September 2012.

It’s doubtful that many of these companies would have launched a tablet if the iPad hadn’t achieved the commercial success that it did.

Tablets - BlackBerry PlayBook

When the iPad was first announced and demonstrated onstage by Steve Jobs, it was lambasted by most of the tech press as “a big iPhone”, and even suffered some ridicule due to the unusual name. You can view the full list of positive and negative comments from 2010 on The Next Web here – it makes for rather interesting reading looking back at the original iPad.

Here’s a select few of the more negative comments:

  • “The Apple iPad is basically a gigantic iPod Touch” – Pogue
  • “The bottom line is that you can get a laptop for much less money — with a full keyboard, DVD drive, USB jacks, camera-card slot, camera, the works.” – Pogue
  • “Not good for anything that requires Flash”

None of these mattered though and the weird name soon became the norm. The iPad went onto sell more than 3 million units in the first few months alone, and 7.46 million by the end of the year. Until Q2/Q3 2013, it’s clear that iPad sales were on a firmly upwards trajectory…

Tablets - iPad Sales by Quarter

 

As far as Apple goes, here are some more numbers which illustrate the stagnation in sales over the past year. As shown below, Apple’s other hit product the iPhone finished the year 39.3% up on the year-ago quarter, whereas the iPad was predicted to finish down by around 13%. We won’t know the true figures until Apple releases its latest quarterly results, expected to be on the 26th of January.

Tablets - iPad Sales

 

While the Apple data shows that iPad demand has indeed slowed, the phenomenon is also reflected in global tablet sales, with a similar slowdown by almost every manufacturer according to IDC:

Tablets - Hype is Over

 

Market analysis firm Gartner reported in October last year that it expects tablets to account for less than 10% of devices purchased in 2015, and that as tablet growth slows new buyers are turning to alternative devices and existing users extending the lifetime of their tablets.

The report also claimed that tablet sales worldwide will reach 229 million units (an 11% increase from 2013, compared to a 55% growth the year before). According to Gartner, the downward trend in tablets is partly caused by the extension of life of current tablets to 3 years by 2018 and the prevalence of hybrid 2-in-1 devices:

Some tablet users are not replacing a tablet with a tablet, they are favoring hybrid or two-in-one devices, increasing its share of the ultramobile premium market to 22 percent in 2014, and 32 percent by 2018 – Gartner

Why have tablet sales slowed?

Tablets are almost certain not to be the hit product in sales that we thought just a year or two ago. But tablets are definitely here to stay and companies such as Apple, NVidia, Microsoft and Samsung are still releasing great new devices with faster multi-core CPUs, ever higher resolution screens and improved battery life, that show there’s still life in the tablet market.

There are a couple of theories why tablet sales have slowed. As smartphones become larger and “phablet” sales (i.e. those phones over 5.5-inches) increase across the world (especially in Asia), consumers are less likely to buy a tablet as larger phones take over many of the tablet’s functions. This is especially true in emerging markets where more price-conscious consumers are more likely to buy a single device: those people tend to buy the biggest super-sized phone they can, instead of a tablet.

Tablets - Samsung Galaxy Note 4

“Phablets” such as the Samsung Galaxy Note 4 may be cannibalising sales of tablets.

 

Furthermore, tablet replacement cycles are longer than smartphones. It’s not uncommon for many people to buy a new smartphone every two years, especially when subsidised carrier contracts expire which means they can get an upgrade for free or for a small outlay. Because tablets are not usually subsidised but bought outright at full price (and are typically Wi-Fi only models) there is no incentive to upgrade after two years.

It seems unlikely that interest in tablets has waned – after all, they are powerful devices (to wit, the iPad Air 2 which has blown away most of the competition in key benchmarks) that can handle all but the most complex of tasks. They are still more convenient, portable and easy to use than a laptop for checking email, playing casual games and surfing the web.

Another report (“Global tablet sales set to hit the buffers”) by the Asia News Network, has a lot of in-depth analysis on the state of the tablet market in 2015. Among the insights revealed, it’s stated that global tablet sales are expect to slow down for the first time in history, quoting IDC which estimates similar growth figures as Gartner at just 7.2%.

Here’s another chart which shows the predicted unit sales of tablets worldwide. Forrester predicted a few months ago that overall sales of tablets in 2015 would reach 57.1 million units, a 7.3% rise from 2014, compared to 12.4% the year before and 22.9% the year before that.

Tablets - Sales Forecast

Again, the main reason given is the gradual introduction of large-screened smartphones such as the iPhone 6 Plus and Galaxy Note 4, as well as larger phones over 4.5 inches. There is anecdotal evidence to support this – for example, “Pocket”, a kind of save for later reading/video app, says that users with an iPhone 6 now spend 72% more time reading on their phone, and 80% for iPhone 6 Plus users. Moreover, those reading on tablets accounts for just 28% of reading time.

In the early days of the tablet market, device life cycles were expected to resemble those of smartphones, with replacement occurring every two to three years. But what has played out instead is that many tablet owners are holding onto their devices for more than three years and in some instances more than four – IDC

Another factor might be that many people believe there is no real innovation in the tablet sector right now, and as Apple’s competitors have essentially failed to provide a real alternative to the iPad, the company is under less pressure to come up with something unconventional. Perhaps the much-rumoured 12″ iPad Pro (or “iPad Plus” as it may be called) will help revive growth in Apple’s tablet lineup.

Even in 2014, the fact that the 7.9″ iPad Mini had only a minor update (i.e. addition of Touch ID) might be a telling sign that Apple expects the iPhone 6 Plus to cannibalise sales of the Mini. Then again, if you’re going to cannibalise sales, it’s much better if you’re doing it to yourself than someone else doing it to you. Couple that with the higher margins Apple makes on the iPhone 6 Plus, and Apple probably isn’t too concerned if the Mini suffers and the 6 Plus gains momentum.

The outlook for tablets in the year ahead

It’s unlikely that the wealth of predictions by the market research firms and analysts is completely off. It’s certainly true that tablet sales have slowed and will continue to exhibit uninspiring growth in 2015. But that won’t stop Apple, Samsung, Microsoft, Amazon, Google and others from releasing even better models with more capable hardware and better specifications all round.

Microsoft’s approach with its Surface lineup looks like a promising approach to stimulate interest, as those devices run full blown Windows and can be used more like a traditional laptop and keyboard – they are in fact being touted as just that – laptop replacements. However, the Surface Pro 3, while a great device and well received, hasn’t exactly seen overwhelming sales either.

The touchscreen tablet in its purest form is still preferred by most people but even newer hardware and more innovative products won’t suddenly reignite tablet sales. The stark fact of the matter is that large devices such as phablets mean that we don’t need our tablets quite as much as we used to.

Tablets - Microsoft Surface 3

Will we see more tablets emulate the Surface Pro 3, which is touted as a more capable device for “real” work…?

 

The tablet isn’t dead by any means, but it’s status as the next big thing is definitely over. At least on the upside, anyone in the market for a new tablet can look forward to some great new devices this year.

Let us know in the comments below what you think of tablets. Do you own one, and what do you use it for? How often do you upgrade?

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One Response to Will tablets make a comeback in 2015…?

  1. Matt Lacey January 2, 2015 at 1:42 pm #

    “It seems quite a long time ago now, but here’s the original iPad from 2007”
    – not 2007! 2010

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