Worldwide Tablet Shipments Decline 8.5% in the First Quarter as the Slow Migration from Slates to Detachables Continues, According to IDC

The worldwide tablet market once again contracted in the first quarter of 2017 (1Q17) with total shipments of 36.2 million, a year-over-year decline of 8.5%, according to preliminary data from the International Data Corporation (IDC) Worldwide Quarterly Tablet Tracker. The first quarter contraction marks the tenth straight quarter that tablets have experienced a decline over the same quarter a year earlier, with the previous five quarters recording double-digit drops.

The tablet market is comprised of two different product categories, which are headed in very different directions as noted by IDC in the past. Devices offering a first-party keyboard, which IDC refers to as detachable tablets, continue to grow for the most part. Many of these devices have quickly grown to resemble products that IDC refers to as traditional notebook PCs or laptops. The other product category is slate tablets (those lacking this keyboard option), which saw shipments peak in 2014 and is now in a steep decline that IDC believes will continue throughout the forecast period.

“As far as most are aware, the tablet market was created in 2010 with the launch of the original iPad, despite unsuccessful product attempts by other OEMs in the years leading up to this,” said Ryan Reith, program vice president with IDC’s Worldwide Quarterly Mobile Device Trackers. “The rate at which the tablet market grew from 2010 to 2013 was unlike many other consumer-oriented device markets we’ve seen before. However, it appears for many reasons consumers became less eager to refresh these devices, or in some instances purchase them at all. We continue to believe the leading driver for this was the increased dependency on smartphones, along with rather minimal technology and form factor progression.”

At the same time that this roller coaster of tablet growth, peak, and decline was taking place, the personal computer market was experiencing one the worst declines the market’s history. Fast forward to 1Q17 and traditional PCs have returned to growth, albeit relatively flat growth, for the first time since 1Q12.

“A long-term threat to the overall PC market lies in how the market ultimately settles on the detachable versus convertible debate,” said Linn Huang, research director, Devices & Displays at IDC. “To date, detachable shipments have dwarfed those of convertibles, but growth of the former has slowed a bit. In IDC’s 2017 U.S. Consumer PCD Survey, fielded over the previous two months, detachable owners held slightly more favorable attitudes towards their detachables than convertible owners did for their convertibles. However, owners of both were far more likely to recommend a convertible over a detachable.”

IDC’s outlook is that detachables will continue to far outpace convertibles in shipments, but the market pendulum seems to be swinging back in favor of convertibles if ever so slightly. Still, the detachable market has proven it will move with major product launches and Microsoft and Apple have yet to launch their 2017 salvos.

Tablet Company Highlights

Apple experienced its 13th consecutive quarter of year-over-year shipment decline despite being the market leader in 1Q17. Apple’s results show that it is not immune to the changing dynamics of industry and consumer demand, part of which is due to the ongoing success of its other product lines. 2016 was Apple’s first full year of iPad Pro shipments, which included the launch of the smaller screen lower-cost 9.7 inch version. This product line quickly elevated Apple to the top of the growing detachable tablet market segment, and IDC believes Apple is in a good spot to remain competitive at the top of this segment despite using a ‘mobile OS’ while many of its competitors are entering the space with Windows-based devices.

Samsung remained the number 2 tablet provider despite seeing shipments decline 1.1% year over year in 1Q17. Much like Apple, Samsung continues to migrate its tablet portfolio to the detachable segment and to support this the company launched three new products at this year’s Mobile World Congress event in Barcelona in February. After supposedly leaving the PC business in 2014, Samsung now finds itself approaching the market again with a handful of Windows 10 detachable tablet models. The move isn’t surprising as the entire industry seems keen on taking advantage of this market opportunity.

Huawei was the only company among the top 5 to experience positive growth in 1Q17 with shipments of 2.7 million, which was up 31.7% from the 2.0 million shipped in the first quarter a year ago. Like Samsung, Huawei has also slowly migrated its tablet portfolio from an Android slate tablet lineup to now include a mix of Windows-based detachable devices. It is somewhat unclear how serious Huawei is about going down the Windows device route, but given this quarter’s growth while others decline it seems the mix strategy and tablet play is working for the company.

Amazon.com continues to fluctuate in and out of the top rankings with its low-cost Kindle Fire devices. In 1Q17 the company shipped 2.2 million devices, all of which continue to be aimed at a very aggressive price point with a strategy to drive content and product sales via the device. Regardless of the changing industry dynamics mentioned in this release, Amazon seems poised to remain a competitor given its market strategy.

Lenovo rounded out the top 5 with 2.1 million tablets shipped in the quarter. Of all the companies in the top 5, Lenovo is likely best positioned in terms of channel strategy to grow its tablet business and IDC expects to see more of its successful notebook PC lineup migrate into the detachable tablet category. Lenovo captured 5.7% market share in 1Q17, which was down just slightly from the 5.5% market share it had at this time last year.

Notes:

• Total tablet market includes slate tablets plus detachable tablets. References to “tablets” in this release include both slate tablets and detachable devices.

• The reference to ‘convertibles’ for convertible notebooks, which are notebook PCs that have keyboards that can either flip, spin, or twist, but unlike detachable tablets, convertible notebook keyboards are hardwired to the display.

• Data is preliminary and subject to change.

• Company shipments are branded device shipments and exclude OEM sales for all companies.

• The “Company” represents the current parent company (or holding company) for all brands owned and operated as subsidiary.