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What upgrade cycle? Tablet sales crater for fourth straight quarter

Fondleslabs floundering as folks lose interest

Global shipments of tablets have fallen for the fourth successive quarter, according to data from analyst house IDC.

In the third quarter of 2015, manufacturers shipped 48.7 million fondleslabs worldwide, down 12.6 per cent year on year. IDC estimates that there are 581.9 million tablets in the world, but that sales growth is slowing down sharply.

"We continue to get feedback that tablet users are holding onto devices upwards of four years," said Ryan Reith, program director with IDC's Worldwide Quarterly Mobile Phone Tracker.

"We believe the traditional slate tablet has a place in the personal computing world. However, as the smartphone installed base continues to grow and the devices get bigger and more capable, the need for smaller form factor slate tablets becomes less clear. With shipment volumes slowing over four consecutive quarters, the market appears to be in transition."

So in transition to what? The analysts think that the next big thing is going to be "detachable" computers – basic laptops that come with a detachable screen that can be used as a tablet, such as Microsoft's new Surface Book or Google's Pixel C.

"The first generation of detachable tablets failed to gain much traction, as they represented a series of compromises in terms of both operating system and hardware that few consumers or businesses were willing to accept," said Tom Mainelli, VP of devices and displays at IDC.

"The devices shipping now represent a clear evolution of both OS and hardware, and it's our expectation that both home and pro users will begin to embrace the form factor in larger numbers going forward."

In the meantime, sales look bad for almost all of the market leaders. Apple, the company that popularized the tablet market and remains its grand fromage, saw sales decline 19.7 per cent in the last 12 months, something the firm acknowledged was an issue during its earnings statement on Tuesday.

"We sold 9.9 million compared to 12.3 million in the year-ago quarter. iPad sell-through was 10.4 million as we reduced channel inventory by about 500,000 units," said Luca Maestri, Apple's CFO. "We exited the quarter below our 5 to 7 week target range of iPad channel inventory."

Apple is, no doubt, hoping that the iPad Pro will address this, and IDC is optimistic too, but points out that the company is both cannibalizing their own customers with new smartphones and tablet types, and facing tougher competition from other vendors.

The number two player, Samsung, also saw sales fall by 17.1 per cent. But it isn't making anything like as much money out of this as Apple, since it's selling at the low end of the market.

Lenovo's sales rose fractionally by 0.9 per cent, leaving it comfortably in third place among vendors. But Acer's sales cratered, falling 43.4 per cent as consumers shunned its cheap and cheerful hardware.

The only real winner in the tablet market is fifth-placed Huawei, who saw sales rise by 147.9 per cent. Three quarters of the units it shipped were cellularly connected and the firm has had great success selling these to customers who don't have reliable wired internet access. ®

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