GlobalTabletForecastBII

KEY POINTS

  • The tablet market's performance continues to be sluggish. In the second quarter, the tablet market climbed a moderate 11% year-over-year (YoY), only a slight improvement over its historical worst-ever 9% year-over-year growth in the first quarter. Global tablet shipments will grow at just a 9% compound annual rate over the next five years, according to our forecast
  • Commoditization is a factor. Most growth is coming from low-priced, generic tablets. Our "other" category, which groups together many of these so-called white-box manufacturers, now makes up 41% of all tablet shipments. Meanwhile, Apple and Samsung have both lost share. 

What's driving the slowdown?

BI Intelligence conducted a global consumer survey on tablet usage and purchase intent to gain insight into why device sales have slowed, and which brands are vulnerable. 

Here are the highlights: 

  • Market saturation: 92% of our survey respondents owned a tablet, and 80% of these tablet owners used high-end brands, including Samsung, iPads or iPad Minis, and Nexus devices. Affluent consumers in developed consumer economies have already adopted brand-name tablets. 
  • Tablet owners are taking a long time to replace their aging devices with new ones: 44% of our respondents had bought their tablets in 2012, 2011, or 2010. But demand for replacement devices is soft.
    • Only 63% of respondents who bought their tablets in 2010 planned to replace them with a new one in the next year.
    • Only 50% of respondents who bought their tablets in 2011 and 2012 said they planned to replace them with new devices in the next 12 months. 
  • Tablets are not true mobile devices: While a majority of respondents said they use their tablet daily, 93% told us they use their tablet primarily on Wi-Fi, instead of a cell connection. This helps lengthen device lifespan, and reduces the incentive for carriers to subsidize out-of-pocket prices for tablets. 
  • Phablets are competing with tablets for consumer interest. 33% of our survey respondents said they are considering buying a phablet — a smartphone that is almost as large as a tablet — in the next couple of years. 
  • Cost is a factor for those who don't yet own a tablet. Among the few respondents who took the survey without owning a tablet, half felt smartphones and PCs take care of their computing needs while another 44% were put off [...]