Technology | Media | Telecommunications

Monday, July 28, 2014

Fragmentation of the Worldwide Media Tablet Marketplace

The apparent softening of the media tablet market may concern some vendors. Clearly, there are signs of saturation in a few of the developed markets. However, the worldwide tablet market grew 11 percent year-over-year in the second quarter of 2014 (2Q14) with shipments reaching 49.3 million units, according to the latest market study by International Data Corporation (IDC).

Although shipments declined sequentially from 1Q14 by -- by an estimated 1.5 percent -- IDC believes the market will experience positive, but slower, growth in 2014 compared to the previous year.

"As we indicated last quarter, the market is still being impacted by the rise of large-screen smartphones and longer than anticipated ownership cycles," said Jean Philippe Bouchard, research director at IDC.

IDC attributes the market deceleration to slow business user adoption of media tablets. Although, the previously reported BYOD to work phenomenon seems to somewhat contradict this assessment.

Despite this trend, they believe that stronger commercial demand for tablets in the second half of 2014 will help the market grow and that we will see more enterprise-specific application offerings -- as illustrated by the Apple and IBM partnership.


Tablet Vendor Market Share

Despite declining shipments of its iPad product line, Apple managed to maintain its lead in the worldwide tablet market, shipping 13.3 million units in the second quarter.

Following a strong first quarter, Samsung struggled to maintain its momentum and saw its market share slip to 17.2 percent in the second quarter.

Lenovo continued to climb the rankings ladder, surpassing ASUS and moving into the third spot in the tablet market, shipping 2.4 million units and grabbing 4.9 percent markets share.

The top five vendor ranking was rounded out by ASUS and Acer, with 4.6 percent  and 2 percent share, respectively. Share outside the top 5 grew to an all time high as more and more vendors have made inroads in the tablet space.

By now, most traditional PC and mobile phone vendors have at least one tablet model in the market, and strategies to move bundled devices and promotional offerings have slowly gained momentum.

Until recently, Apple, and to a lesser extent Samsung, have been sitting at the top of the market, minimally impacted by the progress from other vendor competitors. But there's new growth among the smaller vendors and a leveling of market share. This is causing some degree of market fragmentation -- which is a good thing, for design innovation and pricing flexibility.