Ashwin Rajagopalan
It was the Apple iPad that truly set the tablet category on fire. Windows tablets have been around but it was the iPad – a twenty-tens phenomenon, that exploited a big vacuum between smartphones and laptops. The tablet category hit the fast lane almost instantly and seemed unassailable almost till 2014.
Reality Bites:
The last quarter of 2014 might well go down as a watershed phase for the tablet category. Industry experts were stunned by the 3.2% decline (from 78.6 million units to 76.1 million) in tablet and hybrid sales during the fourth quarter of 2014 (compared to the same quarter in 2013 – Source: IDC). Canalys that does not club hybrids with tablets reported a sharper drop (12%) suggesting that tablet sales had declined to 67.1 million units. The first time the category hit a speed bump. The poster boy of the tablet world – the iPad, reported a 17.7% drop and so did Samsung falling by over 18% year-on-year for the same quarter. eMarketer suggested this decline began earlier in 2014 and confirmed this slowdown with its growth numbers – 54.1% in 2013, 29.1% in 2014 and just 17.1% for this year.
The rise of the phablet:
The primary cause for stagnant tablet sales is a no-brainer – the rise and rise of the phablet. In 2014 over 80% of smartphones sported screens that were 4.5-inches or above, a big change from 2010 when 4-inch screens were considered ‘large’. Gartner reported that Q4 2014 was the Apple iPhone’s best ever quarter (sales-wise). Apple sold close to 75 million iPhones; it’s no coincidence that the 5.5-inch iPhone 6 Plus made its debut during the same quarter. Apple finally ditched its aversion for big-screen smartphones and the consumers responded with a massive thumbs up.
Slower replacement cycles:
If there’s one discernible trend in large markets like India and China, it’s how consumers are changing smartphones sooner (down to 12-15 months from 24 months just a few years ago) than before. It’s a completely different story with tablets where replacement cycles are not as frequent. There’s less wear and tear on tablets, fewer battery charging cycles ensuring more longevity. Tablet manufacturers have given consumers fewer reasons to upgrade their existing tabs – the iPad Mini 2 and 3 is a case in point. The camera is one of the key reasons that goads consumers to switch mobile phones, that’s almost a non-issue for tablets.
Smartphones seem to have ‘sized’ them up:
When the iPad first arrived, mobile phone displays were pokier and laptops were clunkier. Tablets suddenly became the ‘wonder gadget’ for gaming, watching movies on the fly and also cashed in on the switch from paperback to E-book. Five years later most consumers are happier gaming on their smartphones and don’t mind catching movies on their 5.5-inch smartphone during a long commute.
Ambushed from all sides:
Gartner has predicted slower desktop and laptop sales for 2015 and 2016 but it’s the ‘ultra mobile premium’ category that will make the most of this decline and not tablets. According to Gartner feather-light ultra books like the MacBook Air will grow at a whopping 60% this year and close to 40% in 2016 suggesting that most consumers are still not ready to work on complex spreadsheets and PowerPoint decks on their tabs. A plethora of budget phablets seems to be stealing the thunder from low-priced Android 7-inch tablets while devices like the iPhone 6 Plus and Samsung Note 4 are making consumers question the need for smaller tabs like the iPad Mini.
Struggling to define their niche:
Productivity device or entertainment device? 7-inch tablets cant’ seem to deliver on hard-core productivity other than the occasional email or a half-page word document. It’s the same issue with larger tablets, except they at least seem to offer significantly more screen real estate for serious gaming aficionados. E-book readers like the Kindle seem to have an edge among bibliophiles. Tablets have struggled to break the tag that they are better for content consumption than content creation.
It’s still not the end of the road for the tablet:
PC and laptop numbers might be on the decline but tablets are still poised to grow, except the numbers are unlikely to match the scorching growth rates of the first few years of this decade. Many users still prefer the tablet to wind down after a long day – curl up on the couch, browse the web or your favourite news Apps without being interrupted by office emails (like their smartphone). Unless you need a gaming console and a monster TV, tablets are still good enough for a quick spot of gaming to de-stress after a long day. E-book readers might have a significant edge on the battery life sweepstakes but can’t compete with the gorgeous tablet displays for magazines or even comics! We will start seeing more innovations in the tablet space especially if the category needs to hold its ground, education is one segment that tablets are targeting. What’s more, mobile screen sizes seem to have hit a glass ceiling – any bigger and they won’t fit into those jeans’ pockets. That could be another window of opportunity for tablets to reinvent themselves.
