My Thoughts on Technology and Jamaica: Gartner and IDC Forecast Tablets, PC fall, Smartphone rise - How Tablet's 3-Year Lifespan means Sub-US$199 Smartphones, Chrome OS to Dominate

Sunday, December 7, 2014

Gartner and IDC Forecast Tablets, PC fall, Smartphone rise - How Tablet's 3-Year Lifespan means Sub-US$199 Smartphones, Chrome OS to Dominate

Folks, it's now the Fourth Quarter of 2014 and Tablets appear to be in a freefall!

Analyst Gartner is predicting a slowdown in Tablet sales for the entire 2014 when compared to 2013 as stated in the article “Tablet sales growth to tap the brakes this year, says Gartner”, published October 15, 2014 6:29 AM PDT by Lance Whitney, CNET News.

According to their Press Release as stated in “Gartner Says Sales of Tablets Will Represent Less Than 10 Percent of All Devices in 2014”, published October 15, 2014, Gartner, they're projecting the following:

1.      229 million units in 2014
2.      11% increase in Tablet sales from 2013
3.      9.5% of total worldwide sales of devices

By comparison, 2013 was a robust growth year for Tablets, which grew by some 55%. Clearly a slowdown in Tablet Sales in progress as I’d predicted in my blog article entitled “IDC and NPD Group record Tablet Decline and Phablet Rise - “White Box” Chinese Tablets and Wearable Computing in First Quarter of 2014 making Tablets obsolete in the Year of the Sheep” .

Tablet Sales Growth slowing – 3 Year lifespan a crossing of the PC Market and smartphones

As predicted earlier in 2014 based on First Quarter Sales for 2014, the downward trend in Tablets was due to the cheaper Chinese so-called “White-Label” Generic Tablets, which many companies in the US of A may be ordering and customizing instead of buying premium Brand Tablets.

The Table makes it clear that the growth areas are in smartphones, mobile phones and hybrid devices. Analyst Gartner also projects that Americans are waiting longer before upgrading their Tablets, resulting in a lot less Tablets being purchased than projected each year, often as long as three (3) years.

Tablets aren't sold with a 2 -year contract like smartphones. So there is no pressure in Developing World countries to buy a new Tablet every two (2) years as many opt to buy the Wi-Fi only models and not the Wi-Fi and 3G/4G LTE Models.

By 2018, Gartner predicts the following:

1.      90 million fewer new Tablet purchasers
2.      155 million fewer Tablet replacements

Analyst IDC also put out Stats Projections that seem to confirm Gartner''s Projections for 2014 as reported in the articleIDC: Tough year for Tablets, not as bad as thought for PCs”, published November 25, 2014 11:48 AM PST by Edward Moyer, CNET News:

1.      7.2% Growth in Tablet shipments compared to 52.5% Growth in Tablet shipments in 2013
2.      235.7 million units to be shipped Worldwide in 2014

Breaking down IDC's stats, the marketshare for the major Operating Systems works out as follows:

1.      67.7% for Google Android Tablets
2.      27.5% for Apple iOS Tablets
3.      4.6% for Windows Tablets

Table Sales are slowing. But nowhere is the slowdown more dramatic than Apple. The inventor of the Tablet back in 2010 now relegated to Second Place after ceding Pole Position to the horde of Android Tablet.

Apple iPad Sales are falling – Incremental Apple iPad Air 2 and iPad Mini 3 Fail to impress

With only a few incremental changes in the Tablet market that Apple basically invented, such as the Touch ID for the Apple iPad Air 2 and the Apple iPad Mini 3, many Americans and Europeans see no reason to buy a new Tablet.

Apple has claimed that Apple iPad sales are down by 14% as reported in the article “Apple's role reversal: 'Mature' Mac outpaces iPad in revenue”, published October 20, 2014 2:28 PM PDT by Ben Fox Rubin and Shara Tibken, CNET News so these stats corroborate what the analysts are claiming.

The reasoning is also the same as well; slowing sales due to consumers holding on to their Apple iPads longer as noted in the article “Apple’s iPad sales are not so magical after all”, published  April 24, 2014 6:06 PM PDT by Shara Tibken, CNET News.

Even when they do, they're face with dozens of inexpensive Google Android “White Label” Tablets, prompting them to hold on to their Tablets a lot longer, often handing them down to their children whenever they upgrade.

Consequently, the Tablet Market, at least from Apple’s point of view, behaves like a cross between the Smartphone and the PC Market. Apple iPads, once the Golden children of Apple heart, has fallen out of favour, with even sales of Apple Macbooks outpacing the Apple iPad.

Tablets fall, smartphones rise - Developing World bonanza for sub-US$199 smartphones

While Tablets appears to heading for a bust, it's boom time for smartphones. Overall the market for Google android smartphones is expected to grow their marketshare by some 47% in 2014. To give you an idea of Gartner's prediction for sales, a quick perusal of their projections should set you straight.

In terms of sales, that translates to an increase in the Sales of Google Android smartphones in the Developing World are expected to grow as follows in 2014:

1.         52% for midrange Android Devices
2.         100% for Chinese branded smartphones

Replacements are not a problem, being as the cheaper units are easier to replace than a more expensive Tablet:

1.      71% in 2014, an increase of 17 percentage points from 2013

So smartphone, particularly in the Developing World, is looking bright for 2015, Year of the sheep. But what of the fortunes of the humble PC and Laptop Market? Not so good I’m afraid…..

Chromebooks growing in U.S. K-12 Schools – 2017 will see Triple Growth to 1% Marketshare

The Tablet Market is faring a lot better than the PC market, which is in steady decline albeit according to analyst NPD, there was a brief spike in PC sales during the Back to School Season in the US of A which starts in August 2014 to September 2014 as reported in my blog article entitled “NPD Group Stats say PC’s up 3% - Why ACSI says American prefer PC's as the Price is Right for the Return of the Mac”.

The PC Market has been in a freefall and the predictions of analyst IDC are no different from Gartner, albeit slightly more positive. They're projecting a 2.7% decline, compared to 3.7% last year 2013. This puts total shipments for PC's at around 306.7 million units, matching somewhat with Gartner's projections.

Right now the only area of growth in the PC Industry is in Chromebooks which according to stats from the IDC are making headway in the U.S. K-12 School System as noted in my blog article entitled “IDC Stats say Google Chromebooks dominates U.S. K-12 School System - 1 TB Free Google Drive as Microsoft HP Stream and 12.9-inch Apple iPad in 2015”.

Analyst Gartner also expects Chromebook shipments to triple by year 2017, boosting the Asian-dominated Chromebook market to 1% as noted in my blog article entitled “Chromebooks Sales to Triple by 2017 – How Rapid Sales Heaven for PC Makers means Apple iPad and Microsoft Surface Pro 3 under attack”.

Chromebooks may result in a U.S. PC Makers finally deciding to full commit to Chromebooks alongside their Asian Partners. Already Dell has a the US$160 7-inch Dell Venue 7 and US$200 8-inch Dell Venue 8 as detailed in my blog article entitled “US$160 7-inch Dell Venue 7 and US$200 8-inch Dell Venue 8 - Pure Android 4.4 KitKat Tablet in Red and Black”, so making Chromebooks isn't much of a stretch for them.

Smartphones are the growth engines for PC makers who’ve switched to making them with the Tablet Market showing the same susceptibilities as the PC Market. So expect an increasing reliance on smartphones and the production of more Chromebook PC's and Laptops to augment the falling sales of PC's and Laptops in 2015 and beyond.

No comments: