Phablet Cannibalise Tablets, Which Take on Notebooks

Tablet PC demand is slowing, market observers agree (Display Monitor Vol 21 No 22), with competition from smaller display products rising.

According to NPD DisplaySearch, tablet demand will only rise 2% this year, to 254 million units; significantly lower than the previous expectation of 14% YoY growth. Demand will continue to rise in single digits, mainly driven by replacement demand, through 2018. Average screen size is expected to rise from 8″ in 2014 to 9″ in 2018.

“[A] more competitive overlap among display sizes for tablet PCs, notebook PCs and smartphones” is expected, said DisplaySearch VP Hisakazu Torii. For example, the iPhone 6 Plus (5.5″) and Microsoft’s Surface Pro 3 (12″) (DisplaySearch and IDC have both said that phablets are affecting tablet sales this year – TA).

Shipments of 7″ – 7.9″ tablets will be cannibalised ‘somewhat’ by 5.5″+ smartphones in 2014. DisplaySearch expects the share of these tablets to fall from 55% to 35% in 2018. 11″+ tablet shipments will rise from 2% to 14% over the same period, as they directly compete with small notebooks.

A recovery in the global notebook market is expected, due to the ongoing PC refresh cycle, continued Windows XP migration and introduction of low-priced Windows-based models. Shipments are expected to reach 179.6 million units this year, with the decline levelling off in 2016. Flat or slow growth will take place in the years following. Torii noted that “Consumer acceptance of the Windows 9 user interface will be the key to continued notebook PC demand growth”.