Average Small Business to Spend $21,000 on Tablets Next 12 Months, NPD Says

Three in four U.S. businesses with fewer than 1,000 employees plan to buy tablets in the next 12 months, with the iPad topping most lists, said NPD Group’s Q3 SMB Technology Monitor. The average small- or medium-sized business will spend more than $21,000 on tablets the next 12 months, but depending on company size, the intent and amount changes dramatically, NPD said. Companies with fewer than 50 employees plan to spend an average $1,912 on tablets, and companies with 501-999 employees plan to spend $38,749 on average, NPD said.

Despite the boost in tablet spending, PC sales aren’t going away, Stephen Baker, vice president industry analysis for NPD, told us. “This by no means equates to the death of the PC market,” Baker said, but the combination of the length of time since the Windows 7 launch, the need to spend on higher cost infrastructure, and the increased spending on tablets has “clearly put a crimp on PC spending intentions, especially among the largest firms,” Baker said.

In Q3, 36 percent of smaller firms with fewer than 50 employees reported that they expected to hike spending on PCs in the next 12 months, while 23 percent of the firms with 501-999 employees expected to spend more, NPD said. In the 501-999 segment, the expected spend over the coming year was almost $75,000, which would equate to replacing 10-15 percent of a company’s installed base, NPD said. The smallest company in the survey said its expenditure of $3,400 would also fund an upgrade for about 10-15 percent of the firms PC’s, NPD said.

"Right now there seems to be a pretty long window for spending on both tablets and PCs,” Baker said. He said PCs and tablets are different products “for different jobs.” Tablet uptake will mirror the smartphone adoption rate and PDAs before that, he said. Users will drive the business initially, support will expand to manage the various devices and companies will spend incrementally more “to keep their employees mobile and motivated,” he said. Regarding keyboards and other accessories needed to enhance productivity of tablets, Baker said NPD believes there will be “some pickup” in accessories as well.

On the consumer side, Baker was unable to provide data on tablet sales for the holiday season. Regarding Kindle Fire’s impact on the tablet market the season, he said the Fire “clearly expanded the marketplace” due to a price point that was “much more accessible to a new segment of consumers.” At the same time, the $199 device “had little impact on the other devices in the segment,” he said, since the Fire isn’t targeted to the same users or usage model as higher-end tablets. Standard Android tablets “were not selling previously,” and were positioned at iPad pricing levels, he said. “They were going to see price reductions regardless of the Fire being in the market,” he said. So far, the iPad hasn’t reacted on price, he noted, “and we expect iPad sales will be very strong over the holiday.”