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Is the Tablet Moment Over?

The writing might be on the wall for the tablet market, with global shipments now slowing significantly from their jackrabbit start.

The tablet market emerged like a Big Bang in 2010 -- going from nothing to huge, with amazing quarterly growth.

That period of market inflation appears to be over. Analysts at IDC in May released preliminary numbers for the first quarter of 2014.

Predictably, following Apple's 10-Q acknowledgment of a 16 percent drop in iPad shipments compared to the year-ago period, IDC found that the whole tablet plus two-in-one industry was off.

By the numbers, the total shipments of 50.4 million units missed IDC's forecasts, although the industry overall did eke out about 4 percent shipment growth compared to first quarter of 2013. That growth came largely on the strength of the Samsung Android tablet push. Lenovo also had very strong growth, but from a much smaller base.

Where the numbers look bad are in comparison to the fourth quarter -- the market is off by more than 35 percent. Sequential comparisons from the holiday season to the first quarter usually drop, but this is the third quarter in a row, not counting the fourth quarter, when the sales of Apple iPads were lower than the comparable period from the year before.

Apple is still king of the tablet and two-in-one market with 33 percent share. And RCP is very bullish about the Office on iPad opportunity; Apple's install base is a whopping 210 million iPads and even struggling this quarter, Apple sold 16 million new units (see our feature, "Office in the iPad Era").

Apple could possibly re-spark growth with a major price cut. For now, tablets may have found their niche -- an option for high-mobility scenarios, but otherwise a luxury item for those with disposable income left over after purchasing a smartphone to complement an aging PC.

This raises questions about the slow follower approach Microsoft stumbled into by waiting so long after the iPad release to enable a Windows tablet ecosystem and to release the Microsoft Surface.

IDC analyst Jitesh Ubrani noted that, "Although its share of the market remains small, Windows devices continue to gain traction thanks to sleeper hits like the Asus T100, whose low cost and two-in-one form factor appeal to those looking for something that's 'good enough.'"

Meanwhile, some estimates have Microsoft moving about 800,000 or so Surface units in the quarter. That's still small potatoes compared to current tablet sales. But as people replace aging PCs, is there still hope for the two-in-one future that Microsoft is championing? Tell me what you think at sbekker@rcpmag.com, or leave a comment below.

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About the Author

Scott Bekker is editor in chief of Redmond Channel Partner magazine.

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