Tablets feel the squeeze as phablets and hybrids muscle in
| Device type | 2013 | 2014 | 2015 |
| Traditional PCs: desk- and laptops | 296 million | 276 million | 261 million |
| Ultramobile premium | 21.5 million | 37.6 million | 64.4 million |
| PC market total | 318 million | 314 million | 325 million |
| Tablets | 207 million | 229 million | 273 million |
| Mobile phones | 1.81 billion | 1.86 billion | 1.93 billion |
| Other hybrids and clamshells | 2.7 million | 6.5 million | 8.6 million |
| Total | 2.33 billion | 2.40 billion | 2.53 billion |
Worldwide device shipments by segment. Source: Gartner
Tablets are still on course to account for more sales than traditional PCs and laptops by the end of next year but demand for devices such as Apple's iPad and Android slates continues to be hit from a number of quarters.
Growth for tablet sales, which had been projected at 28 percent for 2014, has now been downgraded to about 14 percent for the full year by analyst firm Gartner. In 2013, tablet sales showed a 68 percent increase on 2012.
"The slowdown [in demand for tablets] that we've seen already from the beginning of this year is more pronounced than we expected," Gartner research director Roberta Cozza said.
"It's coming from new users probably being still more attracted to the smartphone, because the smartphone is taking a more central role. The smartphone market is standardising at around five-inch [screens]. It's taken more of a media-consumption role for many users and they just don't see the need for having a tablet."
But pressure is not just coming from the smartphone. Existing users are just not finding enough reasons for replacing their tablet every year.
"They're just lengthening the lifecycle. In North America, and to a lesser extent in Europe, the tablet market is maturing and has reached a certain point of penetration where after that there's a slowdown.
"Tablets are not dead. There will still continue to be some growth but that, however, is reduced."
Nevertheless, Gartner is still projecting sales of tablets worldwide to hit 229 million units this year, representing almost 10 percent of the overall device market.
Because of the attraction of phablets, when buyers are opting for a tablet they are often choosing one with a larger screen.
"If they were to go for tablets today, they would rather go with a larger — maybe a 10-inch or an eight-inch — rather than something smaller than that," Cozza said.
Despite that possible pattern of purchasing, the decline in demand is being felt across the board with sales growth for tablets in all categories registering a decline.
"It's a bit overall because I wouldn't exclude the 10-inch [from the decline], because obviously there's been some slowdown in the iPad category. However, it's definitely more so, if we think about the Android seven-inch tablets — most of those were purchased in 2013," Cozza said.
"That is really not enough time. Even if we think of the lifetime of tablets, it's gone to more than two years now. If you think that many of the Android tablets were mainly purchased in 2013, it's too early to think about replacing them."
Cozza identified growth in the hybrid segment as an important factor affecting both the PC and tablet markets.
"It's the whole share of that hybrid form factor that is really going to grow, and possibly that will be another reason that will also in part squeeze how big the share of pure slates will be," she said.
"We've seen some great designs from the PC vendors for two-in-ones and hybrids. The prices will come down and the designs will improve and both within consumer and enterprise markets that will be the next thing after the notebook.
"All these users are realising, having had a tablet for some time now, what they can do and what they cannot do. So while the hybrid is growing, the share of the 10-inch tablet is remaining quite flat over the forecast period as users will mainly go hybrid — and clamshell, of course, the thin and light clamshells."
The overall PC market is showing signs of a slowing decline, with growth projected by end of 2015. However, any growth is coming from the ultramobile premium category, which includes ultrabooks, rather than traditional PCs or laptops.
Low-end smartphones — including mid-range Android devices — are driving the growth in the mobile phone segment. According to Cozza, the market is favouring companies that can offer value in lower-priced smartphones. That is an area where Samsung in particular has been losing out.
"Samsung is having issues on the tablets front, as everybody else is really, but most prominently on phones. Samsung is really feeling the competition coming from the lower end, where you have all these Chinese players that are pushing into the market very capable smartphones with very good specs at lower price points than Samsung can do," Cozza said.
"I don't think Samsung has been offering at the premium end enough features that would generate a stronger replacement in the higher end of the Galaxy line.
"At the same time Q3 and Q4 are going to be very challenging because their main competitor, Apple, in that premium segment is going to be very strong because of the larger display, which for the iOS installed base of users does represent a very tangible new feature that will generate one of the strongest replacement cycles that we've probably seen so far for the iPhone."
The other problem facing Samsung is a lack of brand loyalty and its failure to create more of a Samsung eco-system to attract and keep users.
"It's very hard and now even their stronghold of the phablet segment is under pressure overall. If you think about China, we started to see some of the news about the pre-orders for the iPhone 6 and iPhone 6 Plus and there's a good chunk of those users — those who can afford it — who will really go for the 6 Plus," Cozza said.
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