Tablet sales globally fell in Q4 of 2014, for the first time since tablets hit the market. While Apple has been the one getting the most attention, this slowdown has affected all tablets on all platforms. There has been plenty of speculation as to why (mainly around the lack of “business” tablets), and a few have hit on what I think is the real reason.
Everyone Who Wants One, Has One
I think the biggest reason that tablet sales have slowed is that everyone (and every organization) that wants a tablet right now has one. Tablets aren’t just a consumer thing, they have also become something of a corporate thing. Several companies have replaced their low-end netbook-style machines with tablets. Granted, tablets are still the minority in the enterprise. The laptop (and even the desktop) still dominate the general purpose computing space. It isn’t that everyone who could use a tablet has one. But for now, the available market has what they want. The available market, though, is likely to grow at some point.
Enterprises are also still trying to figure out where tablets fit in the bigger scheme, so they have bought what they want to start. If they can find a role for tablets (and I’m not convinced the “supertablet” as described in TechCrunch is what is missing), then tablet sales in the enterprise are likely to climb again. What companies are dealing with is the same thing they dealt with when the PC first arrived in the early 1980’s (or when mainframes arrived in the 1950’s): how to you really use the thing. They’ve bought a few, and now they need to figure out if they can use them.
This isn’t all that different from the early days of the netbook. In the first couple of years, netbook sales growth was through the roof as people snapped them up in droves. But then things slowed down as the market reached saturation, and then stopped completely when the tablet came out and pretty much replaced them. The real test will be sales over the long haul, and not just the short-term numbers.
More Like A PC
For the consumer, a tablet is going to be more like a PC purchase. People are going to hang on to them longer than they do smartphones or MP3 players. These aren’t devices that are going to be upgraded every 12-18 months. These are things that people will own for several years between upgrades.
Further, tablets have only started to scratch the surface of the Early Majority. Basically, all of the Innovators and Early Adopters who want one have bought one, and a portion of the Early Majority has bought them. But there’s a segment that is probably taking a bit of a “wait and see”.
But PC Sales Are Up Slightly!
PC sales took a slight uptick in the same quarter, giving rise to the question: are they taking back share from tablets? The problem here is that, when comparing quarter over quarter, we are overlooking the general trend. There is a simple explanation for a short-term PC sales increase: the expiration of Windows XP support.
There are still an enormous number of PC’s out there, around 500 million of them. Some portion of that “fleet” is always being replaced. Replacement is likely higher, and will be for the next year, because a lot of those machines cannot run Windows 7, 8 or 10 all that well. Businesses in particular want (and expect) support for their software, and so there is a shift towards PCs that can run this newer software. Some money that might have been spent on tablets is being spent on PC upgrades to fix a short-term concern.
Couple this alongside the fact that the so-called “Great Recession” has been slowly winding down. People and businesses are buying more of almost everything. Home sales increased in the US. Car sales increased globally. While the tablet hasn’t ridden that wave recently, PC’s may very well be benefiting from this increase in spending.
Is this PC sales increase a trend? We have a single sample where there is an uptick. It is too soon to try to establish a trend.
Tablets Are Here To Stay
The tablet is, in my opinion, now a permanent fixture in the technology landscape, with one caveat: something no one expected supplants it. The tablet effectively killed the netbook. But the netbook didn’t slow PC sales down overall, it just took out the bottom of the laptop market.
If something does replace the tablet, it will be something most people have never seen or heard of. It won’t be bigger phones. It won’t be some other kind of laptop. The tablet was a complete surprise to most people, and it took out the netbook. Whatever takes out the tablet (or the PC or any other common technology) will be something unexpected. If I could predict it, I wouldn’t be writing about it in my blog :-), so, no I have no idea what it could be.
The tablet sales decrease appears to be a market adjusting to its current “natural level”. Tablet sales will likely pick up again when two things happen. First, spending on PC upgrades settles down. Second, when people and enterprises find where tablets really work in their respective worlds. Expect a degree of stagnation while people and companies find the real role for tablets in their worlds.