The sluggish global tablet market is set to make a comeback in 2018, with a return to positive growth that is expected to continue through 2020, a new report from International Data Corporation (IDC) said.
According to the forecast, growth in the tablet market is on track to hit an all-time low of -11.5 percent this year and just 183.4 million shipments. But brighter days are ahead, IDC said.
The market is expected to return to positive growth in 2018 and continue that upward trend through 2020. Shipments during that time are expected to hit 194.2 million units, with growth coming as traditional PCs continue to cede market share to detachable tablets.
IDC said larger tablets are expected to snag share from smaller tablets. Devices 9 inches or smaller are expected to drop from 55 percent of all tablets in 2015 to just 40 percent of all tablets in 2020.
“We see smaller slate tablets being offered at very aggressive price points, leaving little room for revenues outside of a pure volume or platform play like for Amazon for instance,” IDC research director Jean Philippe Bouchard said. “The price pressure combined with a healthier demand on larger screen sizes and detachable tablets will eventually result in an increased portfolio offering from tablet and PC manufacturers.”
Android-based tablets are expected to continue to dominate the space, but are expected to lose some share to Windows-based devices through 2020. Over the next few years, Android tablets will drop from 66.2 percent of the market share to 57.8 percent, while iOS devices will remain steady around 22 or 23 percent. Windows devices are expected to gain share to move from 11.3 percent in 2016 to 19.3 percent share in 2020.
A return to growth for tablets could prove to be a boon for U.S. wireless carriers, particularly Verizon.
During its second quarter earnings call in July, Verizon said it was adding a steady stream of tablets – more than 1 million gross additions during the quarter – but was facing churn headwind from the end of a promotion offered two years ago.
Though Verizon executives said the tablet churn is expected to continue through the end of the year, CFO Fran Shammo said Verizon sees tablets as a major growth opportunity for both devices additions and the carrier’s video offerings.
“If you look at the entire ecosystem that we are developing here, more people who have tablets we know watch more video on a tablet. And if you think about what Lowell outlined on our whole video strategy along with go90, AOL, Yahoo coming into the portfolio fold, we are trying to drive more usage into these devices and we want those users to consume content, which then ultimately drives advertising,” Shammo said during the call. “Today it’s 11.4 percent of the base. I still believe that there is a huge growth opportunity here in the base with tablets and where technology is going. And that is going to generate not only access revenue on the Wireless side of the house, but it’s also going to generate a lot of, if you will, MediaCo type revenue for the future portfolio of digital advertising.”
