Homes and businesses buying second, third and fourth tablets in 2012: Analysts

Competition in the Canadian tablet market will heat up in 2012 as manufactures look to cash in on consumers buying the high-powered handheld devices in multiples, analysts say. “People, families and groups that have a tablet are buying their second, third and fourth tablets,” Duncan Stewart, director of research for technology, media and telecom at Deloitte Canada, said in an interview. “This is sort of a real revolution.” Stewart suggested the tablet market will evolve much quicker than has been the case with other pervasive technologies in the past. He noted that when the television set first entered the market in the 1920s, families bought a single unit and it took nearly 30 years for the idea of multiple TV sets in a single home to emerge. But two years after its introduction, “we’re estimating that five per cent of all the tablets bought this year will be people who already have one,” he said. Stewart told The Wire Report that 40 million tablets were sold in 2011. He estimated that number would climb to between 42 and 44 million this year. Apple Inc.’s popular iPad tablet remains the dominant market leader at the start of the new year and the market remains Apple’s to lose in 2012, independent technology analyst Carmi Levy wrote in an email to The Wire Report. “The iPad 2 dominates the tablet space any way you look at it, thanks to good enough hardware and a software universe that’s in a class of its own,” Levy wrote. “The upcoming iPad 3 will only solidify Apple’s position and enhance its competitiveness against a growing tide of competitive offerings.” More than 18 months after Apple revolutionized the tablet market with the iPad’s introduction in early 2010, the brand continued to outpace the competition last summer but had begun to loosen the grip it had once held on the market. By August, the iPad’s share of the Canadian tablet market had fallen to 56 per cent from 78 per cent eight months earlier, digital analytics company ComScore said. In an interview with The Wire Report on Thursday, Bryan Segal, ComScore’s vice-president of sales, said the company’s most recent data suggests a little more than four million connected devices were sold across Canada in September. “If you look at the iPad cut of that it’s about 24.4 per cent,” he said of the statistic, which accounts for tablets, e-readers, and other devices like personal music players. In 2012, the iPad will face increasing competition from a number of tablets using the newest version of Google Inc.’s Android operating system, Ice Cream Sandwich, Levy noted. He wrote that “the updated OS finally gives Google and its hardware partners a competitive basis on which to challenge Apple.” But Levy added that knocking Apple’s iPad from its “lofty perch” wouldn’t be Google’s main goal in 2012. “Traction in a rapidly evolving and growing market is key for these tablet-wannabees,” he wrote. “Best-of-breed software combined with hardware … should give at least some Android-centric offerings a fighting chance at surviving the year.” Stewart said early sales indications for December and January suggest 2012 will see a greater diversity of size and operating systems on the tablet market. Levy noted that the anticipated release of Microsoft Co.’s Windows 8 operating system will also drive change in the laptop and tablet markets because its design supports both classic PC and touch-enabled environments. “It’s Microsoft’s most pivotal product release in recent memory, so expect a full-on sustained market assault when Windows 8 finally goes live,” he said. Microsoft has yet to announce a release date for its Windows 8 operating system. Both Levy and Stewart agreed the laptop market will also evolve in 2012 as the industry continues to move towards lightweight ultrabooks, which are designed to be smaller than a traditional laptop but more powerful than smaller netbooks. Stewart said the ultrabook’s increasing popularity will stem from consumers recognizing that less hard drive storage is needed for data in an Internet-ready world full of cloud-based storage services. “They’re smaller and lighter but they also have less storage space, and for at least some consumers that’s okay,” he said. “People might not need all of their data on a portable laptop.” He added that a number of tablets are now purchased to supplement a laptop. Instead of consumers buying a new laptop every 24 to 30 months, “we could see the replacement cycle lengthen because of tablets,” he said. “Some tablets will replace notebooks, but other tablets will allow people to defer their purchase for maybe an additional four, six or nine months.” Several companies have also debuted hybrid devices that include different features typically found in either tablets or smartphones at the 2012 Consumer Electronics Show (CES) in Las Vegas this week. But Stewart said similar devices were launched prior to the iPad’s introduction in 2009 and were not particularly popular. “Based on evidence so far for consumer demand, our experience is that those are unlikely to become more than five per cent of the tablet market,” he said. Another factor that could impact tablet sales this year is their increasing use in offices across the country. Stewart said that Deloitte’s initial 2010 estimate predicted that up to 20 per cent of tablets would be purchased by businesses, but data reveals that number is actually closer to 15 per cent. Nonetheless, he said, tablets have been used as “a business tool for the past year” and will likely become a fixture in many offices. One reason for this could be the increasing tendency of consumers to take their personal devices to work, Roberta Fox, head of Fox Group Consulting, told The Wire Report this week. But Fox noted that many tablets and ultrabooks won’t necessarily work as well in an office building as they would inside a home. “Hard objects get in the way you have distance limitations as well as performance challenges with wireless,” she said of wireless Internet signals. “The chips are being embedded in these ultra-light devices, but you have things like a concrete wall, a steel wall … trees and buildings,” which can all interfere with wireless signals, she noted. But because the wireless industry is changing so rapidly, companies and users find themselves swapping out devices more frequently than they used to, she added. “Corporate devices are being swapped out every six to 12 months” just to keep pace with the rapidly changing technology, she said. dgrenier@thewirereport.ca

Homes and businesses buying second, third and fourth tablets in 2012: Analysts

News | January 12, 2012

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