CEO Hubert Joly, the tablet sales boom is already crashing lower.
With over 1,000 brick-and-mortar retail stores, Joly has a good
idea of what consumers are buying, and what devices are losing
their appeal, which begs the question: Has the tablet's
brief period of remarkable growth reached an end?
What are the experts saying?
While Joly most definitely qualifies as an expert in the buying
habits of electronics, it's quite fascinating to see the amount
of research to support Joly's conclusion. Specifically, NPD
DisplaySearch reported back in early July that for the
first time tablet sales as a whole have fallen
With that said, let's just pretend that tablet sales grow in
the single-digits during 2014, or perhaps worse, decline, it
would be a collapse from the 28% growth seen in just the fourth
quarter of last year!
In other words, it would serve as a convincing statement that
tablets have lost their consumer appeal. Furthermore, the first
quarter's modest tablet growth of only 3.9% year-over-year
combined with industry leader
's 8% decline in iPad unit sales to 13.3 million units help
support the notion that tablet sales won't rise 20% this year, as
IDC had expected.
What's the cause?
Beyond the numbers, why are tablets sales suddenly crashing?
Over the last few years there have been several companies to
place big bets on the growth of tablets, including
, Samsung, and of course Apple, who creates more than 15% of its
revenue from iPads.
Granted, many of those same companies like Microsoft also have
an enormous PC and laptop presence, which according to Joly is a
key reason for the changes that are taking place. Specifically,
Joly notes that technology upgrades on older devices like laptops
and PCs means that large touch screens are no longer a luxury,
but rather come standard, and that consumers no longer have to
purchase a tablet to gain access to their smartphone's operating
Nowadays, consumers can buy a Windows PC with Windows 8 that
works seamlessly with their Windows smartphone. In the past
tablets were seen as an option to increase the screen size of
their smartphone, but with PCs and laptops now acting as tablets
of sorts, this option is no longer as meaningful. Not to mention,
smartphone screens have also grown larger, many of which are of
similar size as a tablet.
Tablets rest in the hands of Apple
In part, this old technology upgrade that Joly refers to has
created cannibalization in the tablet space, with consumers able
to have their big and small screens, PCs and smartphones, without
the need for a tablet. Albeit, 250 million units is not a small
number for tablet unit sales, but the point is that sales seem to
With all things considered, Apple has clearly experienced
trouble with iPad sales during its last two quarters. However, it
remains the one company that hasn't entirely merged the operating
systems of smartphones and tablets with PCs and laptops (or
Apple's Mac computers do work in tandem with its mobile
operating system, but the appearance is not identical, and Apple
is yet to implement touch with any of its Mac products. Looking
ahead it'll be interesting to monitor whether Apple follows the
lead of Microsoft and others in making all of its devices
If so, we could possibly see even faster cannibalization of
tablets with Apple owning the largest piece of market share by
Another question to ponder is will a larger screen on the iPhone
6 cut demand for iPads, and ultimately the growth of tablets?
Until we know the answer, all we can do is wait, knowing that
the market is peaking, and wonder if possibly Apple will once
more recreate the tablet industry in October when it's expected
to unveil the next iPad version . Now more than ever, Apple
needs something fresh to boost the tablet market, not just minor
software improvements, but rather a fresh look and significant
hardware changes. Hence, Apple will be instrumental in
determining whether the tablet's appeal with consumers has ran
its course, or if the recent weakness is just a bump in the road.
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