Tablets To Make Up 50 Percent Of PC Shipments Next Year

A new report has starkly revealed how the balance of power has shifted in the troubled PC market over recent years.

Market research firm Canalys warned that tablet shipments will continue to grow at the expense of traditional notebooks and desktops, accounting for essentially half of all PCs shipped next year.

Tablet Rise

In a report 26 November, Canalys analysts, who count tablets among PCs, said that 285 million tablets – led by systems running on Google’s Android mobile operating system and Apple’s iPad – will ship next year, making up just under 50 percent of the PC market in 2014. By contrast, the analysts expect more than 192 million notebooks and 98 million desktop PCs to ship.

In the third quarter, tablets accounted for 40 percent of PC shipments, trailing traditional PCs by fewer than a half million units.

Analysts have been marking the continued trend upward of tablet shipments, forecasting the inevitable time when they will outpace traditional PCs. IDC analysts earlier this year predicted that tablet shipments would exceed portable PC shipments in 2013, and overtake all PC shipments by 2015.

Bob O’Donnell, program vice president of clients and displays at IDC, told eWEEK earlier this year that while tablet shipments continue to grow, people continue to use their PCs as their primary computing devices. However, with consumers using their tablets and smartphones for such tasks as email and Web-surfing, they’re keeping their PCs longer, and buying new ones every five years rather than every four. That drives down annual PC shipments, he said.

According to Canalys’ report, among tablets, those running Google’s Android mobile operating system will account for the bulk of shipments – about 65 percent – followed by Apple’s iPad. In addition, Apple and Samsung will continue to lead the tablet market for now, but changes are occurring in the market that could alter things in the long term.

Apple Squeeze

Apple should expect to continue losing share, but according to Canalys Senior Analyst Tim Coulling, executives with the company tend to worry more about gross margins. Apple remained the top vendor in the third quarter, and should do so again in the fourth quarter, after the release of the iPad Air and new iPad Mini.

“Apple’s decline in PC market share is unavoidable when considering its business model,” Coulling said in a statement. “Samsung narrowly took the lead in EMEA [Europe, Middle East and Africa] this quarter, and Apple will lose its position to competitors in more markets in the future. However, Apple is one of the few companies making money from the tablet boom. Premium products attract high-value consumers; for Apple, remaining highly profitable and driving revenue from its entire ecosystem is of greater importance than market share statistics.”

Microsoft Challenge

While Google-based tablets and iPads continue to dominate the market, Microsoft will see its smaller market share grow in 2014, according to Canalys. The software giant’s $7.1 billion (£4.4bn) acquisition of Nokia’s devices unit makes Microsoft an even bigger player in the mobile device space, according to Canalys Research Analyst Pin Chen Tang.

“As a vendor, Microsoft needs to prove to channel partners and consumers that it is in this market for the long haul,” Tang said in a statement. “Balancing the co-opetition with its vendor partners and embracing a ‘challenger’ rather than an ‘incumbent’ mentality is essential.”

The vendor needs to drive app development and better use parts of its business to build up the ecosystem around its mobile business, he said. The first step should be to figure out how to deal with an overload of operating systems – Windows 8, Windows Phone and Windows RT – for devices running on the ARM architecture.

“Having three different operating systems to address the smart device landscape is confusing to both developers and consumers alike,” Tang said.

Samsung will continue to dominate the Android space – in the third quarter, it held 27 percent of the Android tablet market – but the vendor also is going to feel increasing competition, the analysts said. That competition will come from the hundreds of small- to micro-brand vendors – such as Nextbook, Onda and Teclast – as well as established players like Hewlett-Packard, Lenovo, Acer and Asus.

Canalys analysts – noting that BlackBerry has gotten out of the table space and that Barnes and Noble is moving away from having its own hardware – also expect consolidation through acquisitions, mergers and failures, particularly as PC vendors look to grow their tablet offerings while protecting their traditional PC businesses.

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Originally published on eWeek.