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Don't let the traditionally weak Q1 get you down

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Don't write off the tablet, just because retailers ordered fewer of them in the first three months of 2011 than they did in the final three months of 2010.

Rather a lot of pundits seem to be doing so, based on a communication from market watcher IDC headed "Media Tablet Sales Lag Optimistic First Quarter Targets".

According to IDC, "media tablet shipments into sales channels" (our italics) fell by 28 per cent on a sequential basis in Q1 2011 (1Q11) to 7.2m units worldwide.

Key phrase here is "into sales channels", which are shipments to distributors and the resellers supplied by them.

It doesn't necessarily mean punters bought fewer tablets, only that shop owners didn't need as many tablets to meet demand, either because punters weren't spending, or because the resellers had stocks left from ordering too many tablets in the previous quarter.

Either way, you'd expect Q1 channel shipments to be down on the previous quarters' totals because post-Christmas buying activity is always lower than pre-Christmas sales.

As IDC also said: "The eReader market - which IDC counts separately - experienced similar seasonality, undergoing a sequential decline in shipments to 3.3m units as the post-holiday season proved to be challenging for that category."

But year on year, shipments were up 105 per cent, it said.

Back to tablets, was demand down, or did dealers overstock? The former, IDC suggests: "Media Tablets had a bit of a challenging quarter in Q1, as concerns about general macroeconomic issues and the post-holiday letdown took a toll on demand."

Again, no great surprise there, with no major iPad rivals released in the quarter, and the iPad 2 - whose imminent arrival would have dampened demand for the first model - didn't appear until late in the quarter.

Supply chain constraints limited production, which in turn hindered vendors' ability to sell tablets to punters via the sales channel.

This will change, and IDC said it expects more tablets will ship in 2011 than it first thought. Its forecast has been raised from 50.4m units to 53.5m units, an increase of just under 6 per cent. ®

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