Apple Inc. (AAPL) iPad Mini Not Helping Much: Yearly Growth In iPad Sales To Stagnate In 2014

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Apple Inc. (NASDAQ:AAPL) introduced small screen tablet iPad Mini last year, expecting to penetrate the worldwide tablet market significantly. After two quarters of performance, the growth in iPad sales is showing no sign of improvement.

Why buy a new tablet when you can get one from a relative? This seems to be the mantra of the day for tablet and Phablet buyers, who have reserved thoughts on buying a tablet. Users prefer buying a larger screen smartphone or a phablet, rather than investing in full-featured tablet devices. This leads to a new report by International Data Corporation (IDC), which has reviewed its previously forecasted data for tablets and 2-in-1 sales. According to the revised estimation tablet shipment in 2014 will reach to 245.4 million units, down from 260.9 million estimated earlier. The yearly growth, however, in tablet shipments will remain positive with 25.5% in 2014 as compared to 195.43 million units shipped last year. The new forecast, from 2014 to 2018, suggests a 12.1% Y-o-Y growth, leading to shipment of 387.66 million units of tablets in 2018.

Worldwide Tablet Market by Screen Size 2014 - 2018

The growing demand of phablet, a device with screen size 5.5 to 7 inches, is bringing the greatest amount of damage to tablet industry. While the market share of phabet doubled in one year, 4.3% in Q1 2013 to 10.5% in Q1 2014, tablet industry has been going through a slow down for last few quarters. The user-base is shifting towards the large-screen devices though, the sales of tablets will gradually go down. People prefer buying a larger-screen smartphone or a phablet, which will function both as a tablet and phone.

“Two major issues are causing the tablet market to slow down. First, consumers are keeping their tablets, especially higher-cost models from major vendors, far longer than originally anticipated. And when they do buy a new one they are often passing their existing tablet off to another member of the family. Second, 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,” said Tom Mainelli, Program Vice President, Devices & Displays at IDC.

8 to 11 Inches Tablets Most Favorite

People are always fascinated towards devices that could bring best-of-two-worlds in one. This helped small-screen tablet devices to capture the tablet market  with a rapid pace in early 2013. However, the trend shifted towards 5 to 7 inches devices, launched in scores, during the second half of 2013. Tablet devices, with screen size of between 7 and 8 inches, captured the greater share of Tablet market in 2013, but the will lose its dominance to standard tablet with a screen size 8 and 11 inches in next few years. In 2014, market share of tablet with a screen size between 8 and 11 inches will reach to 47.3% and will upsurge to almost 50% by 2018.

worldwide tablet shipments forecast 2014 - 2018

Windows Share to Almost Triple By 2018

The market share of Windows tablets accounted only for a scanty 3.50% last year, but this share is expected to triple by 2018, accounting for 10.41%. In 2013, only 0.9% people preferred to buy devices with screen size 11 inches or larger. But the trend is expected to go through a paradigm shift when more than 6% users will choose devices sporting 11 inches or larger screen. Surface Pro-3, which boasts of a 12-inch screen, by Microsoft Corporation (NASDAQ:MSFT) is expected to play greater role in the growth of tablet industry.

iPad Experiences a Gradual Decline

In 2013, iOS accounted for one-third of the tablet market with 73 million iPads. Apple tried to capture the small screen tablet market with iPad Mini that recorded encouraging response from the market. The total shipment of iPad is likely to increase from 74.38 million in 2014 to 108.27 million in 2018. Despite of the fact, iPad market share is expected to gradually go down from 30.3% in 2014 to 27.93% in 2018. The trend showcases that Apple is failing to capture a sizeable chunk of new developed tablet market. Reacting to the quickly changing market, Apple Inc. (NASDAQ:AAPL) is reportedly launching a large screen iPhone 6 and a 5.5 inch screen phablet in 2014. The move is also being considered as Apple’s initiative to compensate the shrinking Tablet market share.

Worldwide tablet shipment forecast 2014 - 2018

Windows Captures the Market Share from Android

Android-powered devices accounted for almost two-third of the tablet and 2-in-1 market. Although the market share of Android is likely to decrease from 64.4% in 2014 to 61.6% in 2018, the number of device shipment is expected to double in the five years. A whooping 239.03 million devices are estimated to be shipped in 2018 as compare to 134.34 million in 2013. Samsung Electronics co., Ltd. (KRX:005930) and Lenovo Group Limited (OTCMKTS:LNVGY) were the only companies that improved their tablet market share last quarter. In Q1 2014, Samsung shipped 11.2 million tablet devices, while Lenovo shipped 2.1 million units. The Korean-giant is one of the leading manufacturers in the screen size preferred by people.

Phablets are convenient and multi-faceted. They offer a better multimedia experience. While it is expected that Apple will bring certain changes in the tablet and 2-in-1 market and Android will continue hogging the market, Windows is more likely to take advantage of the current scenario.


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