What Caused the Tablet Sales Slowdown of Q4 2014

By Don Reisinger

Let’s start with the bad news: Tablets were down for the first time in the fourth quarter of 2014. According to IDC, worldwide tablet shipments reached 76.1 million units, down 3.2 percent compared with the 78.6 million slates that were shipped in the fourth quarter of 2013.

As Apple revealed in its financial results last month, the company actually saw a downturn in iPad sales during the fourth quarter. According to IDC, Apple shipped 21.4 million units worldwide in the fourth quarter, down 17.8 percent year-over-year. Apple’s annual shipments of 63.4 million units were down 14.6 percent year-over-year.

Although total shipments were down for the iPad, Apple’s tablet was still a dominant force in the marketplace. During the fourth quarter, Apple was able to secure 28.1 percent of the tablet market, nearly double the share of second-place competitor Samsung. For the entire year, Apple’s market share stood at 27.6 percent, besting Samsung’s 17.5 percent share.

Amazon’s decline in the fourth quarter and all of 2014 was arguably the biggest surprise of the year. Sales of Amazon’s Kindle Fire line of tablets slumped 70 percent in the fourth quarter to 1.7 million units. Annual worldwide tablet shipments were down 66.4 percent for Amazon, falling to just 3.3 million units. In 2013, the company shipped nearly 10 million tablets worldwide.

Lenovo was the only major company to actually see an uptick in shipments in the fourth quarter. During the period, the company’s shipments rose 9.1 percent year-over-year to 3.7 million units. Even better, for all of 2014, Lenovo’s tablet shipments were up 43.5 percent to 11.2 million units.

It might be easy to look at the fourth quarter and fret about the future of the tablet space, but it really wasn’t that bad. In fact, shipments were up 4.4 percent in 2014, rising to 229.6 million units. In 2013, 219.9 million tablets hit store shelves. Shipment growth certainly stalled in 2014, but at least the market was up as a whole.

One of the primary issues with the tablet space last year was cannibalization, according to IDC. Apple was especially hurt by cannibalization as its phablet iPhone 6 Plus took some sales away from its lower-end iPads. On the upper end, IDC says that Apple’s iPad was the victim of the success of its MacBook line, which attracted more customers.

Samsung experienced a series of ups and downs in the 2014 tablet market. While the company was able to reach its goal of shipping 40 million tablets in 2014, beating out the 39.7 million slates it shipped in 2013, its fourth quarter was abysmal as unit shipments fell 18.4 percent to 11 million. Samsung also relinquished some market share in the fourth quarter, falling from 17.2 percent in the fourth quarter of 2013 to 14.5 percent last quarter.

According to IDC, Lenovo could very well become a template for success in the tablet market. IDC reported that Lenovo’s secret sauce was the depth of its product line. The company offered devices running Windows and Android in several different screen sizes. Looking ahead, IDC believes that Lenovo’s formula of offering a broad product line complemented by choices in operating systems will help the company continue its success in 2015 and prove to be a viable model for competitors.

Although IDC acknowledged that there was a “slow down” in the market in 2014, the company sees good times ahead for tablets. IDC says that tablet shipments this year will be up over 2014, though it stopped short of saying by how much. IDC says that the combination of Windows 10’s launch, larger screens, “productivity-focused solutions” and new innovations will help drive more shipments in 2015.