Market Trends

Tablet Market Slumps in Third Quarter 2016, Though It's Better Than Q2

• By Richard Chang
• 10/31/16

Things are looking mixed in the worldwide tablet market. Vendors shipped 43 million units in the third quarter of 2016, a year-over-year decline of 14.7 percent, according to preliminary data from the International Data Corporation’s Worldwide Quarterly Tablet Tracker.

In contrast to the annual decline, Q3 2016 shipments were up 9.8 percent over the second quarter of 2016, as the larger vendors prepared for the holiday quarter.

Low-cost (below $200) detachables also reached an all-time high as vendors like RCA flooded the market, according to IDC, a Massachusetts-headquartered market research firm.

“Unfortunately, many low-cost detachables also deliver a low-cost experience,” said Jitesh Ubrani, senior research analyst with IDC’s Worldwide Quarterly Mobile Device Trackers, in a prepared statement. “The race to the bottom is something we have already experienced with slates and it may prove detrimental to the market in the long run as detachables could easily be seen as disposable devices rather than potential PC replacements.”

Here are some tablet highlights from the IDC report:

• Despite Apple’s marketing push for the iPad Pro, the iPad Air and Mini lines have been the models with mass appeal, accounting for more than two-thirds of its shipments in the third quarter 2016. Although Apple’s tablet shipments declined 6.2 percent year over year, total iPad-related revenues were flat for the quarter, thanks to the iPad Pro offering.
• Samsung continued to hold the No. 2 position. Fortunately for the South Korean electronics giant, the negative press from the Galaxy Note 7 did not bleed over into its tablet business. However, overreliance on the slumping slate market led to a decline of 19.3 percent compared to Q3 2015. Samsung’s attempt to enter the detachables market with its TabPro S at the beginning of 2016 seems to have taken a back seat, as its price and position remain uncompetitive.
• The Amazon Prime Day sale in early July led to a huge surge in shipments of its Fire tablets. The already low-priced device was offered at a 30 percent discount then, and continued to remain popular through the rest of the quarter. The new Fire HD 8 released in early October will likely perform well into the holiday quarter as it follows Amazon’s strategy of selling low-cost tablets as a gateway and companion to its ecosystem.
• Overall, Amazon experienced a whopping 319.9 percent increase in tablet shipments in Q3 2016, compared to Q3 2015. Amazon’s remarkable growth is partially attributed to the fact that IDC did not include the 6-inch tablets offered by Amazon in Q3 2015, IDC said.
• Lenovo continued to maintain its stronghold on Asia/Pacific (excluding Japan) as well as Europe, Middle East and Africa. Though the company has many aspirational products across its entire consumer electronics portfolio, none were enough to raise the company’s profile in the tablet market, resulting in a 10.8 percent decline in Q3 2016. While the latest Yoga Book announced at IFA garnered some praise, IDC said it will be counting this device as a traditional PC.
• Huawei’s strong presence in the smartphone market and overall brand recognition has cascaded into the tablet market, IDC said. The vendor offers a very strong value proposition as many of its tablets (more than two-thirds) come integrated with cellular connectivity while maintaining a similar price to rivals who only offer WiFi-enabled devices. Huawei’s presence in Asian, European, Middle Eastern and African markets remains strong.

For more information on IDC’s tablet report, visit the company’s Worldwide Quarterly Tablet Tracker. IDC does charge a substantial fee for the full report.