More and more people are choosing large-screen smartphones over 7 to 8-inch tablets. That is based on the latest figures presented by the International Data Corporation (IDC).
Tablets and 2-in-1s, or tablets that can be used as slates and laptops, are still selling well. However, sales are no longer skyrocketing because they have taken a huge hit from the rise of phablets, or devices that combine the functions of both a phone and a tablet.
In a statement released Thursday, IDC reports that it has lowered its predicted tablet sales for this year to 254.4 million units. That is 6.5 million tablets less than its original forecast of 260.9 million and accounts for a 12% year-on-year growth rate, which is a paltry figure compared to the 51% growth rate in 2013.
IDC believes the introduction of phablets, which saw a significant increase in market share this year, is one of two reasons for the decline in tablet sales. In the first quarter of 2014, phablet makers shipped a total of 30.1 million units. That number represents 10.5% of the market share, which has more than doubled from last year's 4.3%.
"The rise of phablets - smartphones with 5.5-inch and larger screens - are causing many people to second-guess tablet purchases as the larger screens on these phones are often adequate for tasks once reserved for tablets," explains Tom Mainelli, program vice president for devices and displays at IDC.
The second reason is, while users have realized they no longer need to buy new tablets because they can read books and watch movies on their phablets, the faltering tablets sales are pushed down even further by the fact that people are holding on to their tablets, especially the more expensive high-end models, much longer than manufacturers expected. People do not see the need to buy the latest model when it comes out, and when they do buy a new slate, they end up giving their older tablets to other family members, IDC says.
However, IDC believes demand for larger-screen 2-in-1 tablets, such as Microsoft's newly unwrapped 12-inch Surface Pro 3, will help the tablet market bounce back even as demand for smaller displays are slowing down. Admittedly, tablets with displays 11 inches and up owned only 1% of the total market share in 2013, but IDC believes that figure will double by the end of 2014 and grow as much as 6.6% by 2018 as the today's workers increasingly go mobile and demand a portable device that can be used for work.
"The shift back toward larger screens will mark a welcome sea change for most vendors as the average selling price for these devices will remain roughly 50 percent higher than the average sub-8-inch device," says research analyst Jitesh Ubrani of the Worldwide Quarterly Tablet Tracker.
