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How Large Smartphones Compete with Small Tablets

Media tablets have already been adopted by millions of new users during the course of this year. Worldwide tablet shipments are expected to reach 221.3 million units by the end of 2013, that's down slightly from a previous forecast of 227.4 million but still 53.5 percent above 2012 levels, according to the latest market study by International Data Corporation (IDC).

However, new growth will slow in the coming years, as some key markets approach the saturation point. Shipment growth is forecast at 22.2 percent year-over-year in 2014, for a total of 270.5 million units. By 2017, annual market growth will slow to single-digit percentages and shipments will peak at 386.3 million units, that's down from the previous forecast of 407 million units.

One key factor to watch is the mix of small vs. large media tablet sales. The market has trended toward small tablets over the last 24 months, but the rise of large smartphones could attract people back toward larger tablets as the difference between a 6-inch smartphone and a 7-inch tablet isn't great enough to warrant purchasing both.

The Apple launch of its iPad Air, a much thinner and lighter version of its 9.7-inch product, could herald another market transition back toward larger screens -- assuming that people are willing to pay the higher price.


"In some markets consumers are already making the choice to buy a large smartphone rather than buying a small tablet, and as a result we've lowered our long-term forecast," said Tom Mainelli, research director at IDC.

Meanwhile, in mature markets like the U.S. -- where tablets have been shipping in large volumes since 2010 -- IDC says they're less concerned about big phones cannibalizing shipments and more worried about market saturation.

A transition toward larger tablets could be a positive development for Windows tablets, which generally benefit from a larger screen area. Even so, Windows-based tablets are not expected to gain share from tablets running Apple iOS and Google Android until the latter part of the forecast.

For months, Microsoft and Intel have been promising more affordable Windows tablets and 2-in-1 devices. This holiday season, IDC expects a huge advertising push for these devices, as both companies flex their marketing muscles in the hope of improving sales.

However, IDC says they still don't expect these tablets to gain much traction. They note that we're already halfway through the holiday quarter, and though there have been some relatively high-profile Windows tablet launches -- from Dell, HP, and Lenovo -- we've yet to see widespread availability of these new devices.

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