IDC: Q4 Global Tablet Shipments Show First Year-Over-Year Decline

For the first time since the market's inception in 2010, global tablet shipments dipped year over year, declining in the fourth quarter of 2014 by 3.2 percent, according to research firm IDC.

But despite the forecast for tablets such as the Apple iPad, Samsung Galaxy Tab S 10.5, Nexus 7 and Acer Iconia Tab 8, solution providers expressed optimism for the future of the devices.

[Related: Apple Reports Record iPhone Sales, But iPad Sales Plummet]

"We're still seeing staggering numbers and some good volume for the tablets," said Rick Jordan, director of mobility sales at Tenet Computer Group, a Toronto-based solution provider and partner of Samsung and Lenovo. "There's still a need for tablets, whether it's for educational verticals or demand from the consumer side. It's hard to say how resellers will deal with tablet sales going forward. If you look at most clients, a lot of times they have three devices, like a smartphone, tablet and a notebook. It comes down to the usability of applications and what you're trying to get out of various devices."

The 3.2 percent decline for the fourth quarter was pushed by longer-than-predicted tablet replacement cycles, as well as a market shift toward large-screen phones, or phablets, said analysts.

Tenet Computer Group's tablet sales dropped under higher enterprise demand for Ultrabooks, such as the HP EliteBook, a Windows 8 notebook that can transform into a tablet, according to Jordan.

"We're not seeing so much of a decline in our tablet sales as we're seeing an increase in sales of Ultrabooks, which fits our client base. Out tablet sales are flat but they're not decreasing strongly," he said.

Apple took a strong lead as the top tablet vendor in the fourth quarter, with 21.4 million units shipped, beating second-place vendor Samsung's 11 million units and third-place vendor Lenovo's 3.7 million unit shipments.

Amazon took the steepest hit in its shipments, falling 70 percent from 5.8 million shipments in the fourth quarter of 2013 to 1.7 million units in fourth-quarter 2014.

Though the fourth quarter saw a decline, shipments for the full year of 2014 increased by 4 percent, according to IDC. But tablets still face issues in short-term shipment rates.

"In the early stages, everyone was under the impression that the replacement cycle of a tablet would be similar to a phone, roughly two years, but the reality is that the replacement cycle is a lot closer to that of a PC, every four to five years," said Jitesh Ubrani, senior research analyst at IDC. "And with the rise of phablets, we're seeing a diminishing demand for small-screen tablets. Apart from these two primary factors, there are other contributing factors such as the rise of wearables that compete for the share of disposable income."

Looking forward, Ubrani said that early buzz surrounding Windows 10, Microsoft's new unified operating system, could have an important role in boosting the 2-in-1 space, as well as the potential for commercial adoption of tablets.

"Commercial adoption of tablets and 2-in-1s has still been quite low but we’re already seeing the incumbents make huge headway -- Apple’s partnership with IBM, Google’s push for Android in education and enterprise, Samsung’s Knox platform -- all are expected to bring positive growth to the industry," he said.

NEXT: Apple Partners Remain Bullish On iPads

Despite Apple's lead as the top tablet vendor in the fourth quarter, the Cupertino, Calif.-based company still struggled in its iPad sales, which were down 17.8 percent from last year's 26 million shipments.

But Raul De Arriz, national government sales manager for Apple specialist Small Dog Electronics, Waitsfield, Vt., said he isn't worried.

"While new big phones may be eating into tablet sales, the main reason we're not seeing new tablet sales is because people are holding on to tablets more than they do with the iPhone," he said. "I think we will see tablet sales spike when the replacement cycle goes through."

Apple CEO Tim Cook remained positive about the iPad's future during Apple's recent earnings call, although he acknowledged there wouldn't be an immediate sales bump in tablet shipments.

"I am still very optimistic and bullish on the iPad in the long run, as I've said before," he said. "In the short run, I don't think you'll see a miraculous change or improvement. [Part of this is] because the upgrade cycle is longer, it's longer than an iPhone, probably between an iPhone and a PC. We haven't been in the business long enough to say that with certainty, but that’s what we think."

PUBLISHED FEB. 3, 2015