Tablets to Experience Lowest Growth Rate, ABI Research Finds

The installed base of tablet computers will rise in 2016 by only 4 percent, the smallest amount since the category arrived in 2010, says ABI Research.

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Global tablet shipments aren't the only numbers falling in the tablet marketplace—the number of tablets being used by consumers and businesses around the world is also falling as they are not replaced as they get older, according to new data from ABI Research.

The so-called global installed base of tablets, which is the number of devices in use, will peak at about 373 million units by 2016, which is up only about 4 percent from the 360 million devices being used in 2014, ABI said in a Sept. 24 announcement.

In recent years, the growth of tablets in use year over year had been increasing dramatically, Jeff Orr, an ABI Research analyst, told eWEEK. In 2011, the tablet installed base globally stood at about 75 million devices, and it soared in 2012 to about 172 million units.

"It was almost a vertical kind of change," with a 129 percent growth rate in 2012, said Orr. In the last few years, though, tablet shipments have been declining as the market has become saturated and the installed base is now showing those same signs of shrinkage, he said.

"This will be the first time that this has happened," said Orr. "Until this time, that installed base has been growing at a fairly decent clip."

What is happening is that buyers are shifting from purchasing their first tablets to buying replacement units as their original devices get older, or dropping the older tablets and not replacing them, he said.

In 2014, the growth rate for the global tablet installed base stood at 25 percent over 2013, according to Orr.

"In the U.S., Japan, South Korea, Canada, most of Western Europe, including the U.K., France, Germany and Spain, there's been a saturation," said Orr. "A majority of people who wanted them have them. So what we are seeing is a decline in the installed base, which means that the new products coming in are not growing that pool faster than products are aging out of the installed base."

And that, Orr said, "is a good reflection of where the maturity of the tablet is at this point."

What the market is seeing, he said, is that previous tablet buyers are either replacing their machines with new tablets, moving to 2-in-1 convertible laptop/tablet devices, or just replacing them with laptops, large-screen smartphones (phablets) or other computers.

Some users are "deciding that it was nice to have a tablet but that they don't need it now," said Orr.

At the same time, he said, ABI Research doesn't expect to see tablet sales disappear or "fall off a cliff. There's not something that's going to replace it. They're probably going to have a very long life [in the market], but we've probably seen the best of the market."

Amazon's upcoming $50 Fire tablet and Apple's long-awaited large-screen iPad Pro will bring new users to the world of tablets, said Orr, but the $799 to $1,079 price range for the iPad Pro will limit its choice to certain users. "It's not going to be the iPad for everyone," he said.

Microsoft is doing lots of advertising to consumers about its Surface tablets, but it has not been leading to huge amounts of sales, said Orr. "It's expensive, and by the time you add keyboards and cases and docking stations they can add up to $1,000."

What will be interesting over the next few years, he said, is if the larger screen tablet segment makes a comeback for the devices.

About 48 percent of the global tablet installed based is in North America, with about 50 percent of those devices running Android and 42 percent running iOS, according to ABI Research. The data comes from the company's quarterly research.

In July, research from IDC showed that global tablet shipments continued to wane as market leaders Apple and Samsung were losing sales share for the devices, according to an earlier eWEEK story. The report, which covered second-quarter 2015 global tablet shipments, showed overall tablet sales down by 7 percent to 44.7 million compared with the same period one year ago. Apple and Samsung saw their tablet shipments drop by 17.9 and 12 percent, respectively, according to the data.

A similar study on consumer tablets released in July by ABI Research found that shipments in the first quarter of 2015 fell by 35 percent compared with the fourth quarter of 2014, giving the category its worst quarter-to-quarter decline since it was first tracked in 2009. Year-over-year, the decline was 16 percent, according to an earlier eWEEK report.