Next year almost half of all personal computers shipped will be tablets, signalling the latest milestone in the apparently inexorable rise of slates and the decline of old-school PCs.
According to a report by researcher Canalys, the worldwide PC market (which it defines as covering desktops, laptops, and tablets) grew 18 percent quarter-on-quarter in third quarter of this year, despite desktop and notebook shipments continuing to decline.
Tablets accounted for 40 percent of all PC shipments in the third quarter, less than half a million units behind global laptop shipments.
The researchers forecast overall tablet shipments will hit 285 million units in 2014 and 396 million units in 2017. Apple has maintained its position as top tablet vendor throughout 2013, and the launch of the iPad Air and new iPad mini will strengthen that in the fourth quarter, according to Canalys.
It also notes that Apple's desktop and notebook business has also remained stable while other vendors have seen their shipments deteriorate (recent figures from Gartner show that Apple — once considered to be niche player — is now among the top five PC vendors in Europe).
However, Apple's focus on protecting its margins will see its PC market share begin to erode, the analysts predict, as it continues to focus on selling high-end, high-price machines rather than mass-market devices. Nonetheless, it remains one of the few companies actually making money out of the tablet boom right now.
The tablet phenomenon has hit planet PC like a runaway comet: many vendors are still scrambling to work out how to deal with the damage and avoid it becoming an extinction level event.
Canalys said 2014 could bring a flurry of acquisitions, mergers, and failures as PC hardware vendors of all sizes struggle to maintain their desktop and notebook business while attempting to succeed in a tablet market that is characterised by large volumes and low margins.
"The idea of the traditional PC has really gone away," Canalys senior analyst Tim Coulling told ZDNet.
Established PC companies have struggled to come up with rivals to either cheap Android devices or Apple's pricier iPads. To date, Windows-based tablets have met with little success, while the limited margin on low-end Android devices leaves PC makers with very little room to manoeuvre (plus the rise of Chromebooks is giving them pricing headaches in the laptop market too).
The analyst group forecasts that Windows 8.1 and Windows RT devices will take five percent of the tablet PC market in 2014, up from two percent last year. Microsoft has been making a major push with its Surface tablet PCs and is in the process of acquiring Nokia's device business to give it more momentum in smartphones and tablets, but Canalys said it needs to prove to channel partners and consumers that it is in the market for the long haul.
"How we see it playing out over the next few years is very much like what we're seeing in the smartphone space. We see Android taking up a larger percentage of total shipment volumes if you are looking at tablets, notebooks, desktops. We see Apple continue to have a shrinking market share, but stable shipments in the premium end of the market and we see Windows getting squeezed in the middle," Coulling said.
Canalys research analyst Pin Chen Tang said Microsoft needs to balance the competition with its vendor partners and embrace a 'challenger' rather than an 'incumbent' mentality when it comes to tablets.
"To improve its position it must drive app development and better utilise other relevant parts of its business to round out its mobile device ecosystem," he said in a statement, noting that addressing the confusion around Windows Phone and Windows RT is the first step. "Having three different operating systems to address the smart device landscape is confusing to both developers and consumers alike."
But it is Android-powered devices that will really drive growth in the market and are forecast to take a 65 percent share in 2014 with 185 million units.
A new wave of "small-to-micro" device manufacturers are using the cost and time-to-market advantages of their Chinese supply chains and are "eating up tablet market share", the analyst warns.
And while the big vendors such as Acer, Asus, HP, and Lenovo have all entered the tablet price war, with entry-level products at less than $150, Canalys notes: "With vastly different cost structures these vendors will continue to find it extremely challenging to keep pace with local competitors, especially in APAC and Latin America."
Nonetheless, Samsung, Android's best known cheerleader, continues to lead in tablets, showing strong year-on-year growth thanks to its broad portfolio. The company notched up 27 percent share of all Android tablet shipments for the third quarter.
So where does this end up? Expect even more variation and experimentation in tablets and form factors as the market fragments. The market will be characterised by ultra-cheap Androids, reassuringly expensive iPads and Windows machines trying to mostly plot a path in between: expect to see, for example, much more aggressively priced Windows tablets now that Windows 8.1 has given manufacturers the option of smaller screens.