Tablet Demand Slows During Alleged Mobile Device Boom
IDC reported a huge slowdown in the tablet market during Q4.
Between Apple's (NASDAQ:AAPL) big iPhone shortfall, the slowdown at Samsung (OTCMKTS:SSNLF), and the financial messes at HTC (TPE:2498), BlackBerry (NASDAQ:BBRY), and Google's (NASDAQ:GOOG) Motorola, there just hasn't been much good news out there.
If that sounds depressing, then stop reading now because the tablet market looks like it just hit the skids, too.
Before we go further, let's remember that we're dealing with a single data point here, so take any associated doom-and-gloom forecasts you may hear with a grain of salt.
Let's get to it.
So Wednesday morning, our friends at IDC reported that the tablet market grew by just 28.2% in Q4.
This represents an ongoing slowdown, as you can see in this chart.
IDC filled us in on the problems:
"It's becoming increasingly clear that markets such as the US are reaching high levels of consumer saturation, and while emerging markets continue to show strong growth, this has not been enough to sustain the dramatic worldwide growth rates of years past," said Tom Mainelli, Research Director, Tablets, at IDC. "We expect commercial purchases of tablets to continue to accelerate in mature markets, but softness in the consumer segment -- brought about by high penetration rates and increased competition for the consumer dollar -- point to a more challenging environment for tablets in 2014 and beyond."Saturation? High penetration rates?
Well again, we're dealing with one data point -- but it sure is an ugly one, right?
The modern tablet market was created in 2010 with the release of Apple's first iPad.
And we're already hitting the saturation point?
Think about this.
The introduction of the iPad brought PC growth to a halt as people found tablets were good enough for basic computing tasks such as watching Netflix (NASDAQ:NFLX) movies and accessing Facebook (NASDAQ:FB).
All growth markets eventually hit the wall -- but it took PCs three decades to get there.
And even though the smartphone industry is a mess from a profits perspective, it's still growing units rapidly after the iPhone/Android touchscreen era started nearly seven years ago.
It's downright scary that tablets could be running out of gas after just four years, given the rampant competition that is driving prices down.
Remember, in terms of the consumer electronics pie, growth in tablets should theoretically be offsetting weakness in PCs -- but it may just not be happening.
Also note that this quarter (Q1 2014), the industry will be facing a very tough year-over-year comparison against that 142% number from last year. So it's possible that we'll see an even bigger slowdown reported three months from now.
So is the mobile boom over?
It's too early to say that, but the glory days may indeed be finished. Stay tuned.
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