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02 Feb 2017

Tablet Market Woes Continue as Growth in Detachable Tablets Takes Its First Vacation During the Holiday Season, According to IDC

FRAMINGHAM, Mass., February 2, 2017 – Consumer spending during the holiday quarter of 2016 was clearly not aimed at consuming tablets as the market continued its spiraling decline. The fourth quarter of 2016 (4Q16) marked the ninth consecutive quarter that tablet shipments have declined. According to preliminary data from the International Data Corporation (IDC) Worldwide Quarterly Tablet Tracker, vendors shipped 52.9 million tablets in the fourth quarter, which was a decline of 20.1% from the same quarter one year ago. Similarly, shipments of 174.8 million units for the full year 2016 were down 15.6% compared to 2015, marking the second straight year of declining shipments.

"The sentiment around the tablet market continues to grow stale despite a lot of talk about vendors pivoting their product portfolios toward the detachable segment," said Ryan Reith, program vice president with IDC's Worldwide Quarterly Mobile Device Trackers. "Typical tablets without a dedicated keyboard, which IDC refers to as slate tablets, are continuing to lose relevancy across all regions and, as a result, we see the decline happening globally. We do see future growth in some emerging markets like the Middle East & Africa as well as Central & Eastern Europe with the sole catalysts being simplicity and low cost. Unfortunately for the industry these are the devices that don't equate to large revenues."

Vendors that have historically led the notebook PC market are also talking about expanding their product portfolios to include more detachable tablets, although currently there is more talk than action. As a result, Apple and Microsoft are dominating the detachable tablet segment. IDC believes the second half of 2017 will bring a wide range of new detachable devices from the notebook PC OEMs as well as those playing primarily in the smartphone space.

Yet even detachable tablets struggled to maintain momentum in the fourth quarter as flagship products from key players like Microsoft and Apple started to show signs of age. "The market continues to warm up to two-in-one devices, but we're now getting to a point where the price and performance disparity between detachables and convertibles has started to narrow, and this added competition led to a dampening in the growth of detachable tablets," said Jitesh Ubrani, senior research analyst with IDC's Worldwide Quarterly Mobile Device Trackers. "However, we expect this to be temporary as only two of the three major platforms have any significant hardware presence in the detachable market, and as the ecosystems are further refined with future updates and developer support."

Tablet Vendor Highlights

Apple's venerable hold on the tablet market is yet to be challenged although the company is not immune to overall market challenges, declining 18.8% in 4Q16. The iPad Pro lineup made up only a small portion of overall shipments as the iPad Air 2 and Mini tablets continued to account for the majority of the shipments for Apple. For every 10 slate tablets shipped, Apple only sold 1 iPad Pro tablet.

Samsung remained the number two tablet vendor in the holiday season capturing 15.1% market share on 8 million shipments. The bad news is that this was down -11.4% from the holiday quarter in 2015. The Tab S2 and Tab A continue to be the strongest models for Samsung and its largest markets for tablet consumption continue to be the United States, Europe, and Asia/Pacific (excluding Japan).

Amazon's Fire tablets continued their hot streak, earning the company third place overall in 4Q16. The already low cost tablets were further discounted during the Black Friday sales period although this was still not enough to stave off an annual decline. However, it is important to note that Amazon is in the unique position where tablet market share is likely not of significant importance as the company remains highly focused on acquiring additional Prime subscribers regardless of the type of device used.

Lenovo was one of the two vendors to grow in the 4Q16 and managed to gain 2.1 percentage points in 4Q16 over the same period in 2015. With a broad lineup and innovative designs, IDC expects this vendor will be one to watch in 2017.

Outside of price, Huawei's value proposition is cellular connectivity and this was evidenced in their portfolio as the majority of their tablets offered built-in 3G or 4G connectivity. To date, the Chinese company has done well in expanding their reach to Asian, European, and Middle Eastern markets, though their tablet presence in the U.S. is close to non-existent.

Top Five Tablet Vendors, Shipments, Market Share, and Growth, Fourth Quarter 2016

(Preliminary Results, Shipments in millions)

Vendor

4Q16 Unit Shipments

4Q16 Market Share

4Q15 Unit Shipments

4Q15 Market Share

Year-Over-Year Growth

1. Apple

13.1

24.7%

16.1

24.3%

-18.8%

2. Samsung

8.0

15.1%

9.0

13.6%

-11.4%

3. Amazon.com

5.2

9.7%

5.2

7.8%

-0.6%

4. Lenovo

3.7

7.0%

3.2

4.9%

14.8%

5. Huawei

3.2

6.0%

2.2

3.4%

43.5%

Others

19.8

37.4%

30.5

46.0%

-35.1%

Total

52.9

100.0%

66.2

100.0%

-20.1%

Source: IDC Worldwide Quarterly Tablet Tracker, February 2, 2017



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Top Five Tablet Vendors, Shipments, Market Share, and Growth, 2016

(Preliminary Results, Shipments in millions)

Vendor

2016 Unit Shipments

2016 Market Share

2015 Unit Shipments

2015 Market Share

Year-Over-Year Growth

1. Apple

42.6

24.4%

49.6

23.9%

-14.2%

2. Samsung

26.6

15.2%

33.4

16.1%

-20.5%

3. Amazon.com

12.1

6.9%

6.1

2.9%

98.8%

4. Lenovo

11.1

6.3%

11.2

5.4%

-1.2%

5. Huawei

9.7

5.6%

6.5

3.1%

49.9%

Others

72.7

41.6%

100.3

48.4%

-27.5%

Total

174.8

100.0%

207.2

100.0%

-15.6%

Source: IDC Worldwide Quarterly Tablet Tracker, February 2, 2017

Notes:

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

• Detachable Tablets (detachables) are tablets that offer a first party keyboard that can be completely detached from the slate portion. Examples include Microsoft Surface and Apple iPad Pro.

• Convertibles are Notebook PCs (excluded from tablet market size) where the keyboard may flip/spin/slide such that the device may be used in a tablet configuration. However, the keyboard remains permanently attached to the device. Examples include Lenovo Yoga 910 and the Dell XPS 13 2-in-1.

• Data is preliminary and subject to change.

• Vendor shipments are branded device shipments and exclude OEM sales for all vendors.

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

IDC's Worldwide Quarterly Personal Computing Device Tracker provides detailed, timely, and accurate information on the global personal computing device market. This includes data and insight into global trends around desktops, notebooks, detachable tablets, slate tablets, and workstations. In addition to insightful analysis, the program delivers quarterly market share data and a five-year forecast by country.

About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker results are delivered to clients in user-friendly excel deliverables and on-line query tools.

About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,100 analysts worldwide, IDC offers global, regional, and local expertise on technology and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly-owned subsidiary International Data Group (IDG), the world's leading media, data and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC.

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Contact

For more information, contact:

Michael Shirer
press@idc.com
508-935-4200

Ryan Reith
rreith@idc.com
650-350-6242

Jitesh Ubrani
jubrani@idc.com
416-673-2214