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Thursday, September 12, 2013
Tablet Shipments to Top Total PC Shipments in 2013


IDC's analysts forecast tha he worldwide smart connected device market, comprised of PCs, tablets, and smartphones, is forecast to grow 27.8% year over year in 2013, slightly lower than the 30.3% growth in 2012.

The company said the growth would be driven by tablet and smartphone shipments, while the PC outlook has been lowered by 10% in 2013. As a result, the International Data Corporation (IDC) expects tablet shipments to surpass total PC shipments (desktop plus portable PCs) in the fourth quarter of 2013 (4Q13). PCs shipments are still expected to be greater than tablet shipments for the full year, but IDC forecasts tablet shipments will surpass total PC shipments on an annual basis by the end of 2015. Smartphones will continue to ship in high volumes, surpassing 1.4 billion units in 2015 and accounting for 69% of all smart connected device shipments worldwide.

In terms of shipment value, the worldwide smart connected device market will again exhibit double-digit year-over-year growth of 10.6% in 2013, but this growth will gradually slow to just 3.1% in 2017. The tapering revenue forecast reflects the increasing impact of low-cost smartphones and the white box tablet market.

"At a time when the smartphone and tablet markets are showing early signs of saturation, the emergence of lower-priced devices will be a game-changer," said Megha Saini, Research Analyst with IDC's Worldwide Quarterly Smart Connected Device Tracker. "Introducing new handsets and tablet devices at cheaper price points along with special initiatives like trade-in programs from Apple and BestBuy will accelerate the upgrade cycle and expand the total addressable market overnight."

Smart Connected Device Market by Product Category, Unit Shipments and Market Share, 2013 and 2017 (shipments in millions)

Product Category 2013 Unit Shipments 2013 Market Share 2017 Unit Shipments 2017 Market Share 2013?2017 Growth
Desktop PC 134.4 8.6% 123.11 5% -8.4%
Portable PC 180.9 11.6% 196.6 8% 8.7%
Tablet 227.3 14.6% 406.8 16.5% 78.9%
Smartphone 1,013.2 65.1% 1,733.9 70.5% 71.1%
Total 1,556 100% 2,460.5 100% 58.1%

Source: IDC Worldwide Quarterly Smart Connected Device Tracker, September 11, 2013.

IDC expects the lower-cost devices to drive interest worldwide and help to spark uptake among first-time buyers in commercial sectors like education. A new round of device cannibalization is also expected to kick in, but this time with large-screen (5+ inch) smartphones beginning to impact the smaller (7-8 inch) tablet market. "The device world has seen several iterations of cannibalization impacting different categories, with the last few years focused on tablets cannibalizing PC sales," said Bob O'Donnell, Program Vice President, Clients and Displays. "Over the next 12-18 months, however, we believe the larger smartphones, commonly called 'phablets', will start to eat into the smaller-size tablet market, contributing to a slower growth rate for tablets."

Looking forward, IDC predicts the worldwide smart connected device space will continue to surge, with overall shipments surpassing 2 billion units by the end of 2015 with a market value of $735.1 billion. In terms of device mix, total PC shipments accounted for 28.7% of the smart connected device market in 2012 while tablets accounted for 11.8% and smartphones for 59.5%. By 2017, total PCs are expected to drop to 13%, while tablets and smartphones will contribute 16.5% and 70.5% respectively to the overall market. The shift in demand from the more expensive PC category to more reasonably priced smartphones and tablets will drive the average selling price (ASP) for the collective market from $462 in 2012 to $323 in 2017.


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