While mature markets such as North America and Western Europe have driven much of the tablet market's growth to date, research firm IDC said it expects shipment growth to begin to slow in these markets. Faced with growing competition from larger smartphones and the prospect of new categories such as wearable devices diverting consumer spending, the firm modestly lowered its tablet forecast for 2013 and beyond.
The company also adjusted its regional outlook, with maturing markets such as the United States now expected to cede share more rapidly to emerging markets such as Asia/Pacific. The firm’s analysts now expect worldwide tablet shipments to reach 227.4 million units in 2013, down from a previous forecast of 229.3 million but still 57.7 percent above 2012 shipments.
"Year-on-year growth is beginning to slow as the tablet market approaches early stages of maturity," Jitesh Ubrani, research analyst for IDC’s Worldwide Quarterly Tablet Tracker, said in a statement. "Much of the long-term growth will be driven by countries like China where projected growth rates will be consistently higher than the worldwide average."
A secondary trend in the tablet market is the rise of tablets in the commercial segment. Education projects and adoption in vertical markets such as retail are contributing factors as this segment is set to slowly double from the 10 percent share it held in 2012 to 20 percent by 2017.
Market saturation, increased adoption of smartphones with 5-inch and greater screens, and the eventual growth of the wearable category will impact tablet growth in all regions, but are likely to impact mature regions first. As a result, IDC now expects the mature market (comprised of North America, Western Europe and Japan) to shrink from 60.8 percent of the worldwide market in 2012 to 49 percent by 2017.
As a result, emerging markets (comprised broadly of Asia/Pacific, excluding Japan, Latin America, Central and Eastern Europe, the Middle East and Africa) will grow from 39.2 percent in 2012 to 51 percent in 2017. However, smartphones with screen sizes between 5 to just under 7 inches, colloquially known as "phablets," overtook shipments of each of the portable PC and tablet device categories in Asia/Pacific (excluding Japan) in the second quarter of 2013, a concurrent IDC report revealed.
Particularly in emerging markets, where consumers may not have the budget to pick up one of each, the phablet is winning out to capture both the telephony and better browsing and multimedia experience. However, as tablets get more productive, and new categories such as smart watches evolve, IDC expects continued diversity among smart, connected devices.
"A lower-than-anticipated second quarter, hampered by a lack of major product announcements, means the second half of the year now becomes even more critical for a tablet market that has traditionally seen its highest shipment volume occur during the holiday season," Tom Mainelli, research director of IDC’s tablet division, said in a statement. "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."