Market research firm IDC predicts that the overall smart connected market, made up of PCs, tablets and smartphones will grow 27.8% over last year with tablets and smartphones driving that growth as PC sales continue to slow. As a result, it predicts that tablet shipments will pass PC (including desktops and laptops) shipments for the first time in the last quarter of 2013.
PCs are still expected to outship tablets on an annual basis but that will change by the end of 2015. Smartphones are also expected to show no sign of slowing with 2015 shipments estimated to surpass 1.4 billion units and account for 69 percent of the smart connected market.
| Product Category | 2013 Unit Shipments | 2013 Market Share | 2017 Unit Shipments | 2017 Market Share | 2013—2017 Growth |
|---|---|---|---|---|---|
| Desktop PC | 134.4 | 0.086 | 123.11 | 0.05 | -0.084 |
| Portable PC | 180.9 | 0.116 | 196.6 | 0.08 | 0.087 |
| Tablet | 227.3 | 0.146 | 406.8 | 0.165 | 0.789 |
| Smartphone | 1013.2 | 0.651 | 1733.9 | 0.705 | 0.711 |
| Total | 1556 | 1 | 2460.5 | 1 | 0.581 |
But even tablets are not immune to cannibalization. IDC expects that phablets will start to impact the smaller (7-8-inch) tablet market. “The device world has seen several iterations of cannibalization impacting different categories, with the last few years focused on tablets cannibalizing PC sales,” said Bob O’Donnell, Program Vice President, Clients and Displays. “Over the next 12-18 months, however, we believe the larger smartphones, commonly called ‘phablets’, will start to eat into the smaller-size tablet market, contributing to a slower growth rate for tablets.”
As for the overall value of the smart connected market, low cost smartphones and tablets will begin to put the the squeeze on overall market value and profit margins. Overall shipment value will increase 10.6% to US$622.4 billion on 2013 with sub-US$350 smartphones and tablets to account for US$423.1 billion of that. By 2017, overall shipment value will only grow about 3.1% annually as lower-cost devices account for an even larger share of the pie.
“At a time when the smartphone and tablet markets are showing early signs of saturation, the emergence of lower-priced devices will be a game-changer,” said Megha Saini, Research Analyst with IDC‘s Worldwide Quarterly Smart Connected Device Tracker. “Introducing new handsets and tablet devices at cheaper price points along with special initiatives like trade-in programs from Apple and BestBuy will accelerate the upgrade cycle and expand the total addressable market overnight.”
IDC did not provide a prediction as to which manufacturers will dominate the tablet market over the next few years although it’s likely to be the usual suspects.
Source : IDC