It feels like every time you turn around nowadays, another company is launching another tablet with ‘new and improved features’. With this absolute boom in the number of tablets available, it kind of comes as a surprise that the Global Tablet Market is only growing at a CAGR of 8.5 percent from 2014-2019.
A major reason for the unexpectedly low growth rate is the fact that, for every significant driver in the market, there is a nearly equally powerful challenge working against it.
TechNavio analysts have taken a look at these opposing forces to pin down the major drivers and challenges in the Global Tablet Market.
Changing Consumer Usage Patterns
Changing Consumer Usage PatternsConsumer usage patterns have evolved significantly in a very short amount of time. Where it was once only possible to access web-based application via a desktop, most users now access the internet on-the-go.
However, some functionalities can be downright frustrating to try and navigate on a tiny smartphone screen. With their larger screens, tablets have been heralded as the cover-all solution, and an answer to both the entertainment and business-related needs of consumers.
Intense Competition and High Cost of Tablets
Intense Competition and High Cost of TabletsThe high potential of the Global Tablet Market has attracted many new vendors who are all trying to get a piece of the pie. Although Apple leads the market, many new entrants are attempting to design and develop tablets similar to Apple and market them at a lower cost.
The new vendors in the market have adopted low-cost manufacturing techniques that tend to reduce their cost of manufacturing and provide them with a huge profit margin. As a result, the global vendors are entering into price wars with the new vendors, which ultimately reduces their profit margin.
From a consumer perspective, lower prices are always good news. But from a market perspective, the growing competition and consistent price drops could actually affect the overall growth of the tablet market.
And even with low pricing schemes, tablets are still not cheap, and aren’t considered as much of a necessity as a smartphone.
In many parts of the world, the tablet market is still growing at a very slow rate as consumers are not able to afford superfluous gadgets. In addition, tablets are undergoing continuous technological developments, with each iteration being slightly more expensive than the last. The high cost of tablets will inevitably be a thorn in the side of an otherwise strong market.
High Growth Potential in Emerging Markets
Initially, tablets were only really popular in developed nations. In developing countries, the devices were targeted primarily at a very niche segment, particularly the high-income group. However, with the growing economy and the increased purchasing power of consumers in emerging markets such as India and China, tablet vendors are aiming to capture these untapped markets.
Additionally, these countries have huge populations, which presents a large potential consumer base for vendors. Therefore, global tablet vendors are expected to expand their reach in order to capture market share in developing countries through the projected period.
Increased Adoption of Phablets in Emerging Markets
Despite the benefits provided by tablets, some end-users find it difficult to handle a tablet because of its size. Therefore, many end-users are looking for a device that is easy to handle and integrates the advantages of a tablet with the basic functionality of calling and texting provided by a phone.
Enter, phablets, the (albeit slightly bizarre) love child of a tablet and smartphone. These overlarge phones are a solid midpoint between a tablet and a phone, and as a result of this dual functionality, end-users are increasingly adopting phablets over tablets.
To compound the issue, a majority of customers in emerging countries such as China and India consider price and value for money as major determining factors when purchasing any mobile computing device. Phablets are an attractive option for any consumer who might not be able to afford both a tablet and a phone. And since these countries represent a huge customer base because of their large populations, phablet vendors could edge-out tablets in these areas over the projected period.
Benefits of Tablets over Laptops
Tablets have some significant advantages giving them a leg up over laptops, including their light weight, portability and longer battery life.
And as these devices become more and more popular—not only for browsing the internet, but also for business and education applications—vendors and app designers are starting to offer apps which facilitate working straight off of your tablet. Business-oriented apps like Microsoft 365, Google Drive, and TeamViewer are now widely available, which is leading a lot of potential buyers to opt for tablets over conventional laptops.
Competition from Hybrid PCs
Hybrid PCs are a combination of tablets and notebook PCs. They are equally portable and more efficient than existing tablets. An Ultrabook is a type of hybrid laptop introduced by Intel that has some additional features over tablets. It is thin, lightweight, and has an external keyboard (a big advantage for anyone looking to actually work from the device).
Like other notebook computers, the Ultrabook emphasizes fast connectivity and has no input devices such as a CD drive. It is also more power-efficient than a tablet. The added features of hybrid PCs like the Ultrabook could pose a challenge to the growth of the Global Tablet Market during the forecast period.
