Phablets Put The Hurt On Tablets

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Phablets and the longer replacement cycle for tablets have left a dent in demand for slates. The growth rate of tablet sales may already be leveling off, according data from IDC. Tablet makers shipped 50.4 million devices, a precipitous drop of 35.7% compared to the holiday quarter, and a meager increase of just 3.9% from the year-ago period. The numbers suggest 2014 may be a difficult one for companies that make tablets.

Apple managed to stay ahead of the competition during the first quarter, with shipments of 16.4 million iPads. Remember, that's a big drop from the 19.5 million iPads Apple shipped during the first quarter of 2013. Apple's share of the market contracted slightly, from 33.2% in the fourth quarter of 2013 to 32.5% in the first quarter of 2014. Apple introduced the iPad Air and iPad mini with Retina Display during the fourth quarter and enjoyed robust holiday sales.

Samsung saw its share of the tablet market increase markedly. During the first quarter of 2013, Samsung enjoyed 17.5% of the tablet market. That figure grew to 22.3% during the first quarter thanks to shipments of 11.2 million devices. Samsung sells a range of tablets, including the high-end TabPRO and NotePRO line, as well as a couple mid-market slates and entry-level devices. The TabPRO/NotePRO devices didn't reach the market until halfway through the quarter.

[Recent reports suggest a Surface Mini is coming. Read Will Microsoft Mini Surface Tablet In May?]

IDC believes Apple and Samsung will face difficulty drumming up support for their devices for the remainder of the year. "The rise of large-screen phones and consumers who are holding on to their existing tablets for ever-longer periods of time were both contributing factors to a weaker-than-anticipated quarter for tablets," said Tom Mainelli, IDC program VP, devices and displays. "In addition, commercial growth has not been robust enough to offset the slowing of consumer shipments."

Big-screened phones, often called phablets, are everywhere. Samsung kicked off the phablet craze with the Galaxy Note in 2011 and followed it up with two solid hits in the Note II and Note 3. HTC, LG, Nokia, and Sony all offer large-screen devices, which have become big sellers. Most of today's flagship devices boast screens measuring five inches. Phablets push the envelope even further, with displays that stretch to six inches or more.

Replacement cycles are another issue tablet makers will need to either address or get used to. Consider Apple's iPad: Apple has shown a penchant for offering only modest upgrades to its slates year over year, which makes it harder to convince consumers to buy the latest model. The same is true of the hardware made by others. There's no need to buy a new tablet every year, as many devices offer a good experience for 18 to 24 months.

Curious about how the different tablet operating systems stacked up? "With roughly two-thirds share, Android continues to dominate the market," said Jitesh Ubrani, research analyst at Worldwide Quarterly Tablet Tracker. "Although its share of the market remains small, Windows devices continue to gain traction thanks to sleeper hits like the Asus T100, whose low cost and 2-in-1 form factor appeal to those looking for something that's 'good enough.'"

IDC didn't have anything to say about Microsoft's second-generation Surface tablets, which arrived last fall. Microsoft's Windows 8.1 and RT platforms have only a small sliver of the tablet market, wedged between Android and iOS.

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