Why tablet sales are slowing

Remember those predictions about tablets taking over the world and putting good-old PCs out to pasture? Well, scratch that, as it is not happening, at least not in the foreseeable future. Sales are slowing this year, dramatically. The slate market is estimated to only grow by 11 percent, year-over-year, in 2014, falling short of the 55 percent increase that was registered in 2013. So why is this happening?

Well, if you ask Kantar Worldpanel ComTech, it is because "tablets are not smartphones". Giving the US market as example, Kantar Worldpanel ComTech highlights the fundamental differences between the two categories, pointing to long replacement cycles, impersonal nature, resilience and low perceived value of tablets as the main reasons for the sales slowdown.

The replacement cycles are indeed longer for tablets compared to smartphones. Kantar Worldpanel ComTech says that the subsidies that mobile operators provide are lower, and, therefore, do not encourage consumers to replace them every two years, as most do with smartphones. In US, for instance, an iPhone 6 can be had for $200 on a two-year contract ($450 subsidy), while an iPad Air can go for $530 (just $100 subsidy) also on a two-year contract. The up-front cost is prohibitive for the latter. (I'm using AT&T as example of mobile operator subsidies.)

At the same time, software upgrades keep tablets feeling fresh, even years down the road. Apple, the largest tablet manufacturer, supports iPad 2 in iOS 8, despite the tablet launching more than three years ago. And if it ain't broke, don't fix it, goes an old saying.

It is worth adding that new slates offer very little in the way of benefits, compared to older versions, to entice people to upgrade. An old iPad 2 is still able to run most apps that a new iPad Air can. Speaking of iPads, according to Kantar Worldpanel ComTech, the first version has a usage share of 14 percent among Apple slates, surpassed by iPad 2 with 32 percent and iPad 3 with 16 percent.

Tablets are also shared with other people, mostly family members, with Kantar Worldpanel ComTech saying that as many as 20 percent of owners share their slates with family members. I do the same thing, as my other half and I use the same tablet, a Google Nexus 7, without issues. On the other hand, smartphones are treated as more personal items, which hold more private information such as call logs, messages and photos.

What's more, Kantar Worldpanel ComTech adds that even if they are replaced, 36 percent of owners keep their tablets, with half as many of them passing them on to their friends or family members. "Some tablet users are not replacing a tablet with a tablet, they are favoring hybrid or two-in-one devices", says Gartner in its latest forecast on tablet sales.

Meanwhile, the lack of interest from non-tablet users explains why tablet owners would rather pass them on. The research firm reveals that 54 percent of non-tablet owners are not interesting in buying a slate in the next year, and only 10 percent say they likely will while just three percent of them say they most definitely will. Of those who are against purchasing a tablet, 72 percent see their PC (desktop or laptop) as sufficing for the most part.

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