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May 30, 2014

Are the iPad’s days numbered?

IDC numbers show consumers increasingly embracing 'phablet' devices over tablets.

By Vinod

Market numbers have indicated that sales of tablets across the world have slowed as customers instead turn to phablet devices.

In the latest edition of its Worldwide Quarterly Tablet Tracker, analyst firm IDC cut its annual forecast for tablet shipments in 2014 following lower than expected sales in the first quarter of the year.

The firm said the slow-down was due to consumers holding on to their tablets, especially high-end models such as Apple’s iPad, longer than expected, and when they do buy a new one, the older model is often passed on to a family member.

IDC also believes that the rise of phablets – smartphones with 5.5-inch and larger screens – are causing many people to think twice about getting a tablet, as the larger screens on devices such as Samsung’s Galaxy Note are often more than adequate for the sort of tasks once primarily reserved for tablets.

In the past year, the firm saw the number of phablets being shipped more than double, with these devices making up 10.5% of the total number of smartphones shipped throughout the world in the first quarter of the year, equivalent to 30.1 million units, compared to only 4.3% in the first quarter of 2013.

To offset the phablet trend tablet makers will start focusing more on larger-screen devices, such as Microsoft’s new 12-inch Surface Pro 3, which is being marketed as a portable replacement for a desktop PC.

The researcher now estimates that 245.4 million tablets and two-in-one laptops will ship worldwide this year, down from the previous forecast of 260.9 million units. The new forecast represents a 12.1% year-over-year growth rate, significantly lower than the 51.8% annual growth seen in 2013.

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By 2018, the market watcher expects the number of such larger-screen (over 11 inches) devices to increase significantly, making up 6.6% of the total tablet market, up from 0.9% in 2013. This will lead to a fall in the number of 7-8 inch screen devices, whose market share will fall from the 55% seen in 2013 to only 44.5% by 2018. 8-11 inch devices will take up the remaining 48.9% of the 2018 market.

"The shift back toward larger screens will mark a welcome sea change for most vendors as the average selling price for these devices will remain roughly 50% higher than the average sub-8-inch device," said research analyst Jitesh Ubrani.

Figures released earlier this year from analyst house Juniper Research predicted that global phablet shipments would reach more than 120 million units by 2018, after 20 million units were shipped in 2013.

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