iPad Sales May Be Lackluster, But The Tablet Market Overall Is Doing Just Fine
BIIAnalysts have gone from trumpeting the tablet market's upward trajectory to wringing their hands over a too-soon slowdown in growth. Granted, the disappointing iPad sales so far in 2013 and the slowing of the overall tablet market make it look like consumer interest is waning.
But digging deeper, we find that the launch of a a new iPad in time for the holiday season is likely to boost sales before year-end. And attention focused on the iPad will also buoy lower-priced tablets, and help the overall market grow nicely.
In a new report from BI Intelligence, we break down the three-year-old tablet market and look at the latest trends in adoption and market growth, finding that tablet uptake will continue rising at a robust pace. The most significant misreading of the tablet market has been to forget that tablets had the fastest ramp-up of any computing device in history, so a pullback was all but inevitable. As more tablets gain traction at the lower-end of the market, however, there's no question tablet penetration will keep rising.
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Here are some of the most important facts about how the tablet market is shaping up:
- The overall tablet market grew 75% year-over-year in the second quarter of 2013 after 121% growth in the same period during 2012. That's a natural slowdown for an all-new product category, and still a considerable growth rate for a product that saw the fastest initial uptake of any computing device.
- Tablets are a seasonal market, for now, so sales are very dependent on holiday shopping and gift-giving. (Tablets aren't subsidized by carriers.)
- High-profile tablet debuts this quarter from Microsoft, Nokia, Amazon, and others put Apple in a fiercely competitive market.
- Since the first quarter of 2012, Apple has ceded about 40 percentage points of market share to Android, Amazon, and Windows and demand for seven-inch tablets forced Apple to create the iPad Mini last November.
- Apple's iPad is no longer indicative of tablet market trends. The tablet market still grew significantly as Apple's iPad sales slumped.
- We think the overall tablet market will grow 74% in 2013 and forecast close to 500 million tablets shipments in 2016. Our numbers are more optimistic than that of other research firms.
In full, the report:
- Explains why the tablet market follows a unique selling pattern that has resulted in uneven growth in nonholiday quarters.
- Puts the new iPad launches in context and considers how these devices will fare during the holiday shopping season.
- Sizes the tablet market and predicts growth in the coming years, laying out why we believe predictions of slowdowns and 'tablet fatigue' are overblown.
- Breaks down the various tablet alternatives and puts in context how quickly they have overtaken Apple, highlighting how premium iPad pricing is hurting market share.
- Considers how phablets and wearables could be the X-factor that might actually put the brakes on tablet growth.
- Compares U.S. versus international tablet adoption trends and forecasts growth in the underrepresented enterprise segment.
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