Tablet’s social impact remains despite sales slowdown: expert

New data shows that tablet shipments declined year-over-year in last year's fourth quarter — for the first time in the category’s short market history — though a Canadian trends observer says the cultural impact of tablets isn't going away any time soon. International Data Corp. said in a press release Monday that preliminary data shows global shipments of tablets and 2-in-1 hybrids amounted to 76.1 million in the last three months of 2014, down 3.2 per cent from the same period a year earlier. It said that's the first year-on-year dip since the tablet market was kick-started in 2010 with the release of Apple Inc.'s iPad. IDC said tablet shipments for 2014 overall totalled 229.6 million, up 4.4 per cent from 2013. The research company's figures show that shipments were up more than 50 per cent in 2013. Vladyslav Mukherjee, tablet analyst for IDC Canada, said in an email that Canada was forecast to have tablet shipments of 4.52 million in 2014, a gain of 8.1 per cent over 2013. He said final numbers in the coming month should indicate results that are "slightly below or in line with our forecast." The most recent communications monitoring report from the CRTC said tablet ownership in Canada was 42 per cent among anglophones and 30 per cent among francophones in 2013, which was up from 28 and 17 per cent, respectively, in 2012, and 12 and 6 per cent in 2011. Duncan Stewart, research director for technology, media and telecommunications for Deloitte Touche Tohmatsu Ltd. in Canada, said the tablet market grew more quickly than expected at the outset, and that growth prompted some to mistakenly assume tablet sales would eventually equal the smartphone market, which IDC has said saw about 1.3 billion shipments last year. "That is not turning out to be the case," Stewart said in a phone interview. There are a few reasons for this, he said. One is that tablets are not used for as many tasks as smartphones. "You do a million different things on your smartphone," Stewart said. "When I talk to people, 80 to 90 per cent of the people out there use for watching video, they use them for reading newspaper and magazine articles, and they use them for playing games. By in large, they are not email tools, they're not social media tools. ... Most people don't even use them as web browsers. aren't exactly a single-function device, but are somehow less than a multi-function device." Stewart added that so-called phablets, or smartphones with large screens, are cutting into the potential market for tablets. He also said people are keeping tablets for longer than the two-year upgrade cycle that's typical for smartphones. "People don't use them the same way," he said. "You don't drop . I don't think they fit into your toilet if you happen to drop them there. They don't get wet. People don't tend to use them to the same extent outdoors that people do their smartphones. They don't try holding them one-handed while juggling a coffee. That means they're going to break a lot less often." Stewart added that some of the other things that drive smartphone upgrades, such as better cameras and faster cellular networks, don't have the same effect on tablet sales. "Almost all tablets are used over WiFi, which isn't getting better, faster, so the 3G, 4G upgrade cycle isn't driving tablets the same way it is smartphones." Stewart added: "A longer replacement cycle means that when the market's saturated — it went up very quickly and it saturated rapidly — you're not seeing that tremendous driver that you're seeing with the smartphone with the annual or the biennial upgrade cycle." Notwithstanding the stagnation of global tablet sales, the effect this technology has on society will remain for the foreseeable future, Stewart said. "It still has an impact," he said. "It changes certain behaviours. It's an important part of the ecosystem, and its effect does not go away. .... I see them everywhere. I see them in businesses. If you fly out of Pearson in Toronto, all the restaurants have ordering on tablets." Jeff Fan, a telecom analyst with Scotia Capital, said the stagnation of tablet sales doesn't have big implications for Canadian wireless carriers since a "large majority of all the tablets being sold in Canada are primarily WiFi-only, so they're not activating on any sort of data plans." The situation is different in the United States, Fan said, noting that tablet users were the reason AT&T saw a gain in postpaid wireless subscribers in its last quarter. "I think the data prices in the U.S. are more attractive; it's more competitive," Fan said in a phone interview. "It's been priced to spur adoption and usage on tablets. In Canada, we're not really seeing the same kind of postpaid plan subscriptions attached to tablets." Despite the fourth-quarter drop, IDC is predicting growth in the tablet market this year. "Microsoft's new OS, a general shift towards larger screen form factor and productivity-focused solutions, and technology innovations such as gesture interface that could be introduced in tablets will help the market maintain positive growth in 2015," IDC research director Jean Philippe Bouchard said in Monday's news release. Bouchard said in an email that IDC previously forecast that global tablet market would grow five per cent in 2015, though he said the group would release a revised figure within the month. IDC said Apple Inc.'s iPads led the market in last year's fourth quarter with a 28.1-per cent share. Samsung Electronics Co. Ltd., with 14.5 per cent, and Lenovo Group Ltd., with 4.8 per cent, occupied the next two positions. Apple had a 17.4-per cent year-to-year decline in tablet shipments in that quarter, IDC said, while Samsung's numbers were down 18.4 per cent and Lenovo's were ahead 9.1 per cent. — With reporting by Derek Abma at dabma@thewirereport.ca and editing by Peter Henderson at phenderson@thewirereport.ca

Tablet’s social impact remains despite sales slowdown: expert

Broadcast | February 2, 2015

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