Tablet Shipments Decline for the First Time: Should We Worry?

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Just four years after Apple’s (NASDAQ:AAPL) iPad defined the tablet category and the tablet became the next big thing, tablet sales are down for the first time. Time reports that tablet shipments declined year-over-year in the first quarter of 2014, according to a report by NPD Research. The report revealed that 56 million tablets were shipped between January and March, down from 59 million in the same period last year. Time cites product launch delays and the rise of smartphones sized 5.5 inches and larger as the driving forces behind the decline. Larger smartphones are expected to quell demand for 7-inch to 7.9-inch tablets, which NPD reports peaked in 2013.

NPD forecasts that the year-on-year growth rate in tablet sales will fall 14 percent, revised downward from its original prediction by 3 percent, and resulting in shipments of a predicted 285 million units this year. The firm expects the growth rate to slow to the single digits by 2017. However, NPD still does expect tablet sales to continue to grow, surpassing 400 million units in 2018. During that time, shipments of traditional notebook PCs and ultra-slim PCs will continue to decline, with notebook shipments dropping below 100 million in 2018, down from almost 200 million in 2012.

If you want a second opinion, look at the numbers reported in May by IDC. As The Wall Street Journal points out, IDC said that tablet sales actually rose 3.9 percent year-on-year in the first quarter. The discrepancy between NPD and IDC’s numbers can be attributed to differences in the way that the firms define product categories and collect data. Differences in data collection aside, IDC agreed with NPD in that tablet shipments missed their target. While the slowdown in sales could simply be attributed to the maturing of the market, there are a few other factors that could contribute to the slowing growth of tablet shipments: some consumers are using smartphones and PC’s instead, and the devices that they’re using have longer replacement cycles.

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