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Tablet sales are slowing, but there’s a future in business

While Apple’s iPhone continues to generate impressive revenue for the company, sales of its iPad fell by 18% in the final quarter of 2014 compared with the previous year’s figures, despite the launch of the new iPad Air.

However, according to a recent study by Forrester Research, it is not just Apple who have suffered a slowdown in sales, as it seems that the wider tablet computer market is reaching a plateau.

Forrester reports that sales growth fell to 13.2% in 2014 - almost four times less than the previous year. As a result, the research firm has altered its 2018 forecasts to reduce the number of tablet owners worldwide by 15% and the number of tablet sales by 36%.

Market Saturation

Forrester suggests that saturation in the consumer market has a lot to do with this slowdown. At the lower end of the market, it is now possible to pick up a basic Android tablet for as little as £50, making tablet computers an accessible commodity to many consumers.

In 2014, there were more than twice as many Android tablets sold as iOS, providing Android with a 63% share of worldwide tablet sales.

Low Replacement Rates

The biggest growth in tablet sales was observed between 2010 and 2013, when household-name manufacturers such as Apple and Samsung began introducing these products into the market. However, unlike mobile phones, the replacement rate of tablet computers is significantly lower.

Mobile phone providers tend not to subsidise the price of tablets in the same way as smartphones, which are often discounted to provide upgrade opportunities to customers.

Technological advances seem to be more incremental in the tablet market and products rarely offer a new “must-have” feature or benefit. It seems that people are less willing to shell out £500+ for the latest tablet computer models, as they do not differ radically from previous versions.

The rise of the “Phablet”

During the late the 1990’s, mobile phone giants were competing with one another to produce the smallest mobile phones, however it would seem that in today’s world that bigger is most definitely better, with smartphone users looking to take advantage of high-definition displays and touchscreen technologies.

In 2011 the Samsung Galaxy Note was launched, which is largely credited as the first “Phablet” (mobile phone / tablet hybrid) to pioneer the worldwide market. The popularity of the product prompted a number of smartphone manufacturers to start producing their own phablet models, such as Apple’s iPhone 6+ and Microsoft’s Lumia 1520.

However, it would appear that phablets are cannibalising sales of traditional tablet computers, as consumers increasingly substitute their tablets for these lighter and less bulky devices.

The 4th generation of Samsung’s Galaxy Note was released in the autumn of 2014 and sold 4.5 million units in the first month alone, however Samsung’s share of the tablet market actually fell by 5% in the second quarter of the year.

Around 41% of workers surveyed by Forrester reported that the size of their smartphone screen was at least 5 inches and 11% reported that their phablet was now their primary tablet device.

Tablets becoming increasingly critical for businesses

The research reported that more than half of employees used a tablet for work purposes at least once a week. Although this is still less than laptops and smartphones, it does however show that tablets have a critical presence.

Tablets are commonly used as a supplemental device to workers’ PC’s and laptops and Forrester reports that 29% of companies provide tablets for work purposes. However, it seems that many employees bring their own tablet if the company does not.

The correlation between businesses and operating platforms and devices and devices is a complicated one, but Forrester predicts that tablets will continue to become increasingly important over the next five years.

This will provide manufacturers and distributors with an opportunity to move out of the slowing consumer market and take advantage of a growing commercial market.

Interestingly, Lenovo, a manufacturer who focussed on larger screens and productivity solutions, were one of very few companies that saw tablet sales continue to grow at the same rate in 2014 as 2013. It is perhaps features such as these that will make a business-centric market more likely to purchase.


For all your business insurance needs, make Be Wiser Business Insurance your first call. As a specialist broker, we can find excellent value cover to meet the needs of your specific business.
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