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Cloud Demand Evolves and Tablets Reach Saturation

Personal computing device requirements are shifting across the globe, creating challenges for consumer electronics vendors who must respond to these evolving trends. Cloud computing adoption has contributed to the shift in demand, with pervasive mobile internet access being the enabler.

The worldwide installed base of media tablets will become the next casualty of global market saturation, as shipments of the expensive larger slate devices continue their ongoing decline.

Early media tablet sales in 2010 and 2011 enjoyed several good years of consumer usage with both Apple iOS and Google Android devices actively used for three to four years.

New market intelligence data from ABI Research predicts the installed base of tablets will decrease for the first time in 2016 -- as growth from first-time buyers shifts to limited replacement purchases.

"The global installed base of branded tablets will peak around 373 million units at the close of 2015," said Jeff Orr, Research Director at ABI Research.

Led by North America at 48 percent of the installed base, the operating system mix is expected to be more balanced with 50 percent powered by Android, while 42 percent will use iOS.

According to the ABI assessment, with the recent slowdown in first-time tablet purchases, there are several reasons for change within the tablet installed base.

Replacing tablets with tablets: The experiences with first-generation tablets greatly influence what audiences will purchase the second time around. Unique software apps or content, usability, and durability all play a role in the decision-making process.

Replacing tablets with phablets: A converged solution that marries the best of the smartphone (mobility and cellular voice service) with the larger display of a tablet. Phablets are an increasing percentage of smartphone shipments and are a mobile alternative to replacing a tablet.

Replacing tablets with 2-in-1 PCs: For small business owners looking to maintain the productivity of a PC with the mobility of a tablet, choices for 2-in-1 systems are increasing and now available with Windows 10 OS. Low-cost Chromebooks will also be a viable option for some use-cases.

No replacement purchase: Not all tablets will be replaced. Some get handed down or resold while others stop working or go unused in favor of performing activities on some other device.

"The change is an opportunity for both incumbent media tablet vendors as well as challenger brands and form-factors," adds Orr. We'll have to wait and see how the leading consumer electronics companies respond to the challenge, and how cloud services drive this change.

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