The tablet market is on the brink of total implosion, but where could it possibly go from here? There are a few conceivable escape routes, but ones that we think can only offer some temporary respite to a breed of device that is destined to fall down at the knees of the smartphone.
New research shows that global tablet shipments in Q2 2016 came in at 38.7 million units, down 12.3% from 44.1 million units in the same period last year, according to research from the International Data Corporation (IDC) Worldwide Quarterly Tablet Tracker, based in the UK.
Of course, the first company that comes to mind here is Apple, with the huge implications the declining market will have on a company that invented the tablet concept as we know it and laid the foundations for the phablet revolution. The shock news from last week was that Apple’s iPhone sales slipped for two consecutive quarters, but the findings from IDC show that the tablet market is in an even worse state – experiencing decline for seven quarters on the trot.
The research conducted covers both slate and detachable tablets (those with keyboards), and it found that while sales of standard slate tablets are suffering, the small share of detachable tablets have seen impressive growth. Meaning that the evolution of the devices from standalone tablets to a 2 in 1 laptop-tablet has provided a get out of jail free card. But just how temporary this relief will be, is something Faultline will keep a close eye on.
Despite IDC highlighting the 12.3% decline in tablet shipments in its research, it believes that tablets will continue to be prevalent devices on the market – citing Amazon as an important player as it has a proven route to market, as well as the next version of Android, as driving factors for this.
Tablets running Android made up 65% of the 38.7 million device shipments in the last quarter, whereas iOS accounted for 25.8%, and the remaining tablets were running Windows.
For individual device manufacturers, Apple topped the bunch with its 25.8% share, shipping 10 million units in the last quarter, down 9.2% from the previous year. This was followed by Samsung which shipped 8 million units giving it a 15.6% share, but down a huge 24.5% from Q2 2015.
Lenovo was third with a 6.6% share, shipping 2.5 million units, up 3.1%, ahead of Huawei with a 5.6% share, shipping 2.2 million units, up an impressive 71%.
But the surprise of the lot was Amazon, increasing shipments year-on-year by 1,209% to 1.6 million units in the quarter, up from just 100,000 in Q2 2015. The success of Amazon’s Fire tablets and purpose-bred Kindle eBooks over the last year can be put down to the cheap alternative they offer to the high end iPads, as well as the persistent marketing investments put into these products by the US e-commerce monolith.
Aside from evolving into detachable devices, another way to increase tablet shipments is to offer them as part of a package, either free or discounted – just as AT&T has done by offering free tablets from LG and Asus as part of a two-year contract plan and this week also added a Trek 2 HD for just 99 cents and a two-year agreement.
This is the type of deal that will appeal to families, as it’s increasingly clear to see that tablets are essentially becoming hand-me-downs in favor of the latest smartphone, and increasingly tablets are being put in the hands of young children as a modern day distraction, as a much safer alternative to unleashing them on the precious smartphone.
However, Apple’s most recent quarterly results, published last week, showed the company shipped less units while increasing net sales. iPad sales for the quarter were $4.9 billion, an increase of 7% from the same period last year, but shipments were down 9% year on year to 9.95 million units.
This was driven by higher ASPs (average selling prices) for iPads following the launch of the smaller 9.7-inch iPad Pro, but the bigger picture shows iPad sales from the nine months ended June 2016 down 14% to $16.4 billion, and shipments were down 19% to 45 million units.
On the monetization side of things, recent research from Freewheel found that tablets had the lowest share of advertisement views of any device in the US with a 9% share and 13% in Europe. Desktops and laptops are still the top devices for ad views across all devices with a 37% share in the US and 49% in Europe. OTT devices, such as Chromecast and Apple TV, had a 22% share of ad views in the US, but just 13% in Europe.
As device prices continue to plummet, doors will open in developing markets outside of North America, Europe, and South East Asia. Although, as with the iPhone, Apple doesn’t have any desire of positioning itself in these markets – allowing the likes of Samsung to take advantage of marketing its older tablets in lower budget regions.
Data from Strategy Analytics published earlier this year showed that global tablet shipments fell 8% to 223.3 million units in 2015 and 69.9 million in the final quarter, the worst year-on-year performance for the tablet market since the devices were born.
“The market has spoken as consumers and enterprises seek more productive form factors and operating systems – it’s the reason we’re seeing continued growth in detachables,” said Jitesh Ubrani, senior research analyst with IDC’s Worldwide Quarterly Mobile Device Trackers. “At present, it’s difficult for Android to compete with iOS or Windows detachable products. However, the next 12 to 18 months will be very interesting as Google launches the next version of Android with better multi-tasking support and as it begins to bring together it two operating systems.”