Tablet sales catch up with smartphones

 

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By Nicole Kobie in Las Vegas

Posted on 7 Jan 2013 at 08:33

Tablet revenue is set to catch up with that of smartphones, according to CEA analysts speaking at CES in Las Vegas.

The analysts said smartphones and tablets would grab as much as 40% of total tech spending around the world this year, leading growth for the industry.

Calling smartphones and tablets the "dynamic duo", Consumer Electronics Association analyst Steve Koenig said the devices have continued to post a "monumental growth rate".

In the US, household penetration for smartphones increased from 36% to 55% in the past 18 months, while tablets increased from 17% to 44%.

"None of the growth rates match the success that tablets have enjoyed in the market," he said, speaking ahead of CES 2013.

"In 2012, smartphones led tablets [in revenue]. In 2013, it’s a photo finish," Koenig said, saying tablets were "outflanking and out-maneuvering all other technologies". He predicted sales of $37bn at the wholesale level for both smartphones and tablets this year, posting growth despite prices falling.

The analyst noted only three categories would post growth this year, tablets (25%), smartphones (22%) and gaming consoles - and the latter is only expected to see growth because of new hardware launches.

"You can argue smartphones and tablets are cannibalising other tech devices, but if you think about it, what would happened if you hadn’t had smartphones and tablets as innovative products, would you have achieved that growth?" asked GfK analyst Steve Bambridge. "I think it’s unlikely," he said, suggesting tablets and smartphones expanded the tech market overall.

Data from GfK showed tablets dominated laptops in the key holiday shopping season, although both tablets and laptops did see an uplift in September ahead of students returning to school.

Tablet and smartphone sales are being driven by increasing product adoption, but also by replacement cycles - which are much shorter than for PCs. "You put those together, and you get these exponential growth rates for these products," said Koenig.

Market growth

Tech sales will bounce back to growth globally in 2013, but that's only because emerging markets are balancing out troubles in mature markets, the analysts said. Koenig predicted there would be a "return to growth in 2013, but that’s really led by emerging markets... whereas mature markets are pretty much flat, at 1%."

"A lot of those key markets are expected to bounce back in a modest way in 2013... but we’re no longer talking about double-digit growth," added GfK analyst Steve Bambridge.

The situation isn't helped by economic woes in Western Europe, or by "weaker than expected" holiday tech sales in the US. "December sales did not ring true with expectations," Koenig said.