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Tablet Sales Hit by Greater Competition from Phablets

By Iain Pemberton | Small Business

Tablet Sales Hit by Greater Competition from Phablets image iPad486pxTablet Sales Hit by Greater Competition from Phablets

Consumers are on pace to buy fewer tablet computers this year than some analysts had originally forecasted.

Consumers will buy an estimated 227.4 million tablet computers by the end of the year, according to analysts at IDC. They had previously forecasted global tablet sales of 229.3 million units.

Despite that tempered forecast, sales of tablets will end the year 57.7 percent higher than last year.

Analysts believe tablet sales are increasingly coming under pressure from larger-screen smartphones, also known as “phablets”—the portmanteau of “phone” and “tablet.” Phablets are becoming more popular with consumers, and several high-profile devices are set to launch in the second half of the year.

Earlier this week, Samsung unveiled the new Galaxy Note 3 at the IFA tradeshow in Berlin. LG and Acer both also released new phablets for this fall, while Nokia is reportedly readying a 6-inch device running the Windows operating system.

The tablet market is maturing in many countries. Analysts blamed the decline on market saturation in key sales regions, as well as a dearth of new product launches in the second quarter.

IDC said that mature markets, consisting of North America, Western Europe and Japan, will see their share of the tablet sector fall from 60.8 percent of global sales in 2012 to 49 percent by 2017. Much of the long-term growth in the market will be driven by territories such as China, where projected growth rates are consistently higher than the global average.

“We expect average selling prices to continue to compress as more mainstream vendors utilize low-cost components to better compete with the whitebox tablet vendors that continue to enjoy widespread traction in the market, despite typically offering lower-quality products and poorer customer experiences,” said Tom Mainelli, research director for tablets at IDC.

The research also revealed that the adoption of tablet devices in the enterprise is set to continue growing over the next few years. Just one in ten sales last year went to the commercial market. That’s expected to rise to 13 percent this year and 20 percent by 2017.

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