Tablet Market to More Than Double by 2016 as PC Demand Wanes

Wednesday, 05 Dec 2012 12:42 PM

 

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(Updates with PC forecast in third paragraph.)

Dec. 5 (Bloomberg) -- Global tablet sales, led by Apple Inc.’s iPad, will more than double to 282.7 million units in four years as consumers increasingly shun personal-computers in favor of smaller handheld devices, according to IDC.

Robust sales of the iPad, as well as new entrants powered by software from Google Inc. and Microsoft Corp., prompted IDC to boost its 2016 tablet forecast 8.1 percent from a prior projection of 261.4 million, the Framingham, Massachusetts-based researcher said in a statement.

The growth highlights a transition in the industry as more users turn to tablets for basic computing needs such as browsing the Internet, checking e-mail and watching video, a trend that has hurt sales of traditional PC makers including Hewlett- Packard Co. and Dell Inc. Tablet sales will eclipse those of personal computers by 2015, according to a prediction earlier this year from Boston-based research firm Yankee Group.

“Tablets continue to captivate consumers, and as the market shifts toward smaller, more mobile screen sizes and lower prices points, we expect demand to accelerate,” said Tom Mainelli, tablet research director at IDC, in the statement.

The PC market will shrink by 1.2 percent to 348.7 million units this year, the first decline in a decade, market researcher IHS iSuppli projected in October. In August, IDC said it anticipated that the PC market would grow less than 1 percent this year and reach 483.1 million units by 2016.

Microsoft Surface

Microsoft, which has been battered by the PC slump, introduced its Surface tablet earlier this year. Surface and other handheld machines running Microsoft’s Windows operating system will command more than 10 percent of the market by 2016, IDC said today. This year, Microsoft’s share is 2.9 percent.

The introduction of more tablets, including Surface as well as Apple’s iPad mini and Google’s Nexus device, prompted IDC to raise its 2012 tablet forecast 4.4 percent to 122.3 million units.

As more competitors crowd the market, Apple will lose share to devices using Google’s software this year, IDC said. Apple’s share will slip to 53.8 percent this year from 56.3 percent in 2011, while Google’s portion will advance to 42.7 percent from 39.8 percent.

The shares of Cupertino, California-based Apple fell 4.2 percent to $551.54 at 11:20 a.m. in New York, while Google declined less than 1 percent to $686.20.

By 2016, Apple will command less than half the market, with 49.7 percent. Google’s share will slip to 39.7 percent.

“We continue to see Apple iPad as the dominant tablet,” said John Bright, an analyst at Avondale Partners, in an interview. “The market is growing significantly enough to support multiple competitors.”

--With assistance from Sarah Frier in New York. Editors: Lisa Rapaport, Jennifer Sondag

To contact the reporter on this story: Lisa Rapaport in New York at lrapaport1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

© Copyright 2014 Bloomberg News. All rights reserved.

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