October 7, 2013
As technology and devices become more advanced, our world becomes increasingly connected.
These devices that connect us – aka our PCs, smartphones and tablets – are now ingrained in our daily lives, and the market for them is still growing. And although the actual rate of growth decreased slightly from 30.3 to 27.8 percent between 2012 and 2013, the dynamics of this growth are slowly shifting.
More specifically, research shows that public interest in PCs is slowly decreasing (PC outlook has decreased by 10 percent in 2013), while tablets and smartphones step forward to support the market.
According to the International Data Corporation (IDC)*, the worldwide market will reflect this trend sooner than you’d think: Experts predict that tablet shipments will outnumber total (desktop and portable) PC shipments in Q4 of 2013.
To be fair, PCs will still have tablets beat in terms of total shipments for the full year. However, this will probably change by 2015, when annual tablet shipments are expected to exceed those of PCs.
While this shift occurs, however, smartphones will remain dominant. Their high volumes of shipping are predicted to continue, surpassing 1.4 billion units in 2015 and accounting for 69 percent of all smart device shipments worldwide.*
Amid all this shifting, another type of device is making a slow entrance into the consumer market. Many industry experts predict promising results from a sector of smartphone-tablet hybrids commonly known as “phablets” – results that could steal revenue from the market of smaller tablets.
If “The Phablet Phenomenon” ** pans out, these larger-screen smartphones/smaller-screen tablets will most certainly affect growing tablet sales, affecting and slowing their rate of growth, according to experts at IDC.
Devices measuring five inches or larger (e.g. Samsung’s Note series) have been selling at better-than-expected rates since they debuted around 2011, and sales are expected to increase further. It’s due to this unexpected success that other device makers (LG, HTC, Sony are among the rumored companies) are now in various stages of entering the phablet market.
There’s one important reason why experts believe these devices have the potential to become the next big thing: Users can receive two benefits for the price of one.
A phablet’s screen is large enough to accommodate apps and activities that are perfect for tablets (e.g. streaming videos, reading e-books, surfing the web) while still allowing for relatively easier transport. You might say that it’s the perfect balance between a smartphone and a tablet, without having to sacrifice the benefits of both.
To some, consolidating their devices and carrying around one phablet beats juggling two devices. On the flip side, critics say a phablet just can’t fit the standards to be a smartphone and tablet at once. Rather than offering two benefits for the price of one, they argue that users will sacrifice usability.
In other words, it’s too big to act as a smartphone and simultaneously too small to adequately replace tablets.
Based on projections of current trends, the quick growth of the smart device market will continue until 2017, when it is forecast to slow to just 3.1 percent – probably due to the increasing impact from low-cost smartphones and market of white box tablets (custom-designed tablets from non-name brand suppliers).*
Experts believe that lower-cost devices like these will be a “game-changer,” especially at a time when the smartphone and tablet markets are becoming increasingly saturated. So, selling these lower-cost devices in tandem with initiatives (e.g. trade-in programs) could help kick start the slowing upgrade cycle.