Tablet Market Set To Decline As Samsung Cranks Up Marketing

Written by David Richards     10/03/2014 | 07:20 | Category: HOME OFFICE

Just when Samsung Australia is set to crank up a major marketing campaign for their new 12" tablet comes news that the tablet market is facing a significant decline.

Tablet Market Set To Decline As Samsung Cranks Up Marketing

According to IDC research the total tablet market, inclusive of both tablets and 2-in-1 devices, is forecast to grow 19.4% in 2014, down from a growth rate of 51.6% in 2013.

 IDC reduced the 2014 forecast by 3.6% from its previous projection to 260.9 million units worldwide. The reduction in the short-term forecast was due to slowing consumer purchases as hardware iterations slow and the installed base - particularly in mature markets - continues to grow.

Over the course of the past two years average selling prices (ASPs) have declined rapidly in the tablet market, but this too appears to be slowing. In 2012, ASPs declined 18.3% from the previous year, and in 2013 prices dropped another 14.6%. Price erosion has started to slowly bottom out, with ASPs forecast to drop a modest 3.6% in 2014. IDC said it believes ASP declines will slow for several reasons; chief among them are the growth of higher-priced commercial shipments and a consumer movement away from ultra-low cost products.

"After years of strong growth, we expect the white-box tablet market to slow in 2014 as consumers move to higher-end devices that work better and last longer," said Tom Mainelli, program VP of devices & displays at the firm. "In mature markets, where many buyers have purchased higher-end products from market leaders, consumers are deciding that their current tablets are good enough for the way they use them. Few are feeling compelled to upgrade the same way they did in years past, and that's having an impact on growth rates."

As consumer shipments slow in many markets, commercial shipments will grow as a percentage of the overall mix. Much of the tablet growth in commercial to date has been in verticals such as education, but going forward IDC expects tablets to continue to infiltrate small, medium, and large businesses around the world. This commercial growth is likely to benefit Microsoft's Windows over time, added IDC.

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