9 Jul 2011

Tablet shipments below lofty expectations, says IDC

Global tablet shipments in the first quarter fell 28 percent from the fourth quarter and failed to hit expectations, according to research firm IDC.

Specifically, tablet shipments were 7.2 million units worldwide. Although that tally failed to meet expectations, IDC still raised its 2011 shipment forecast to 53.5 million from 50.4 million.

In a nutshell, the tablet market may prove to be just as seasonal as the PC industry and other electronics products. IDC also noted that e-reader shipments of 3.3 million were also down from the fourth quarter. Nevertheless, e-readers are posting 105 percent growth in the first quarter. Tablets don’t have year over year comparisons just yet.

IDC noted that Apple’s iPad continues to carry the tablet market, but the company’s shipments were below expectations. IDC added that “supply-chain hiccups” on screens and the announcement of the iPad 2 hurt units.

Despite the problems with tablet rivals, Android-based devices represented 34 percent of the operating system pie. E-readers, powered by Barnes & Noble’s Color Nook, are expected to ship 16.2 million units in 2011, up 24 percent from 2010.

In a statement, IDC analyst Jennifer Song said:

Although media tablet sales were not as high as expected in 1Q11 due to slower consumer demand, overall economic conditions, and supply-chain constraints, we believe with the entrance of competitive new devices in second half of 2011, the market will sell close to 53 million units for the year and continue to grow long-term.

However, there are a few wild-cards to ponder when it comes to tablet demand. Among them:

Price: $499 as an entry point is still pricey in a down economy. The jobs report on Friday was abysmal and consumers are likely to hold back after seeing some ugly headlines.
Lack of credible rivals to Apple: Apple can’t carry the global tablet market forever. Android tablets—at a better price point—need to step up. TechRepublic’s Bill Detwiler notes that teardowns reveal that HP’s tablet construction resembles a PC. HTC’s Flyer is constructed like a big phone. Those approaches may not work.
E-readers are cheaper: Barnes & Noble’s Color Nook is leading the e-reader race. The dirty secret: The Color Nook is a nice tablet for $250.
Those three items may be enough to prevent tablets from becoming the glory device in terms of unit shipments—especially if the economy remains so-so at best.

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