On August 5, 2013, IDC released the results of its second quarter, 2013, study of worldwide shipments of tablet computers (http://www NULL.idc NULL.com/getdoc NULL.jsp?containerId=prUS24253413). The summary depicts a slowdown in sales growth for this type of computer system. Mr. Tom Mainelli, Research Director, Tablets at IDC surmises “‘With no new iPads, the market slowed for many vendors, and that’s likely to continue into the third quarter. However, by the fourth quarter we expect new products from Apple, Amazon, and others to drive impressive growth in the market.'” (quoted from the IDC summary. We have provided a link to the entire summary in this paragraph).
We see something else at work in these numbers. We think the absolute dollar value of markets are approaching a peak for the iPad type of tablet computer. Most of the forward-looking growth for these products must be found in emerging markets where pricing will have to downwardly adjust if sales are to be made.
We see much more potential in the lower end of tablet computers, especially for emerging markets. But even these tablet computers still lack important features required to really open low end markets for substantial purchases. Multi-tasking capabilities are very limited on most tablet computers, substantially diminishing their appeal to consumers looking for a less expensive alternative to desktop and laptop computers. Important compatibility requirements (for example, support for Adobe® Flash) are missing, so consumers must look elsewhere for devices capable of supporting targeted functionality. Unless tablet computer manufacturers start including these features in their products, we think markets will continue to reflect diminishing sales growth.
The IDC summary points to some exceptions to the general sales slowdown, notably for tablets from Lenovo. If the Miix (http://shop NULL.lenovo NULL.com/us/en/tablets/ideatab/miix-series/miix10/) is producing the sales increase, then our thinking is validated. The Miix runs the Windows 8 operating system on an Intel Atom processor. Windows 8 is, we argue, a more secure operating system than its Android peers and, in fact, runs Adobe® Flash.
The same Lenovo story is at work for Acer, which has experienced spectacular sales growth, quarter over quarter. With Microsoft’s own pricing realignment on the Surface RT and Pro tablets, we think Windows 8 will soon reflect a bigger share of the high end tablet market.
Ira Michael Blonder (https://plus NULL.google NULL.com/108970003169613491972/posts?tab=XX?rel=author)
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