Are phablets, wearable devices posing a threat to tablets?

by Sohini Bagchi    Sep 02, 2013

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Until recently, tablets were considered to be the de-facto mobility devices that are ready to replace the regular PCs. However, some in the industry believe that larger smartphones, fashionably called the Phablets as well as smart wearable devices are now expected to encroach on tablet market share. A recent forecast from analyst firm IDC reveals that tablet growth may be lower in 2013 than previously expected and may decrease even more in the following year.

Not a great fall for tablets

Even though tablet growth will be slower in 2013, IDC analysts believe that the changes are not substantial. The analyst firm has lowered its tablet shipment projections from 229.3 million to 227.4 million in 2013. The main reason tablet market is expected to grow moderately is that in the recent past they are facing stiff competition from smartphone manufacturers - both global and local - who are coming up with devices attaining screen sizes of 5-7 inches, that are almost as large as the smaller tablets, such as Google’s new Nexus 7 and Samsung Galaxy Mega.

“Year-on-year growth is beginning to slow as the tablet market approaches early stages of maturity,” said IDC analyst Jitesh Ubrani. This may imply that the tablet market is unlikely to see massive sales increase each year.

However, even with the fall, overall growth from last year will reach 57%. Ubrani explains that the new sales forecasts is the result of a weak second quarter that saw few product announcements, but the main reason for the change is connected to two newer markets, “phablets” and wearable technology.

Phablets – a booming market

Meanwhile, Phablets that cross between a phone and a tablet, is seeing a boom time, according to IDC. Another IDC report reveals that smartphone device vendors shipped 25.2 million phablets during the period, compared with 12.6 million tablets, and 12.7 million portable PCs. In the Indian market alone phablets accounted for 30% of all smartphones shipped in the second quarter of 2013. The overall smartphone market grew three-fold in the second quarter of the current calendar year, with shipments growing over 50% sequentially.

According to technology analyst Gaurav Kumar, phablets can eliminate the need to juggle between multiple devices. It eliminates the weaknesses of smartphones and tablet. “Phablets are small, compact and with more and more vendors focusing on bigger screens and improved processors, phablets will get better and more efficient in the coming days,” he says.

Kumar however points out that replacement of tablets with phablets will not happen in the near future because tablets are emerging in several markets only recently. But these powerful devices are a beginning of a trend and tablets makers need to gear up for heated competiotions in the coming years.

Wearable devices are in

Wearable tech, which some believe is the new frontier of tech, is also contributing to the decrease in tablet sales. A recent Juniper research has predicted the sales of mobile wearable devicesare likely to reach 70 million units by 2017, as against 15 million units this year. Companies such as Google, Samsung, Sony and Apple that are already brining in their versions of glasses, smartwatches, wrist bands and other wearable devices and other new entrants are expected to drive the market growth,” says a recent Juniper report.

Various smaller companies are also working at making wearable tech an enterprise reality. Dasaradha Gude, CEO, Ineda, the Hyderabad-based company that is bringing to market a wearable processor unit, believes wearable devices can enhance the functionality of a smartphone and is useful in tracking and monitoring in warehouses, production units, factories and logistics as well as other industries.

As wearable devices can be used for data collection, downloading apps and communicating with clients, in the coming years they will outnumber the tablets sales.

Tablets are here to stay

Despite the growing popularity of phablets, as well as emerging categories like wearable tech, it can be said that the fall in the tablet market is marginal and these won’t be replaced by other emerging devices in the near future. Gartner is upbeat on tablet growth. “The increased availability of lower-priced basic tablets, plus the value add shifting to software rather than hardware will result in the lifetimes of premium tablets extending as they remain active in the household for longer,” says research director Ranjit Atwal in a recent report. More than 201 million tablets will ship this year, along with 276 million more in 2014, says the Gartner report.

Meanwhile analysts believe the PC market is further expected to dwindle owing to emergence of diverse mobile devices in the market. IDC states that the total shipments of PCs will fall by 9.7% compared to 2012, and will continue to drift down at least until 2017. Gartner also finds global PC shipments, which includes desktops and laptops, will reach 305 million in 2013, down 10% from last year, owing to other cost-effective and feature rich alternatives such as smartphones, phablets and tablets and to an extent wearable devices.