Global Notebook Sales Hurt by Fast Adoption of Low-End Tablets

Worldwide tablet shipments will exceed those of notebook PCs for the first time this year, while the market leading iPad will lose share to an emerging class of 7-8-inch tablets, NPD DisplaySearch said in a report. DisplaySearch had previously forecast tablet shipments to surpass notebooks in 2015, Analyst Richard Shim told us, but an unexpected surge in shipments of locally branded tablets accelerated growth in emerging markets at the expense of notebook PCs. Small local brands in emerging markets are offering tablets “at much lower price points that are more attractive to first-time buyers,” Shim said. Analysts had expected the price-performance ratio of notebooks to support the category in emerging markets for several years, “but it turns out those buyers wanted convenience more” than performance, Shim said.

Shifting market dynamics are creating the opportunity for a bigger variety of choices beyond market leader Apple, and that’s expected to drive worldwide shipment growth by 64 percent year over year, DisplaySearch said. New screen sizes are allowing major and secondary brands to gain traction in all regions, creating new demand for the tablet category in general, according to the report.

Global tablet shipments will top 240 million units in 2013, topping the 207 million notebook PCs projected to ship during the year, DisplaySearch said. In North America, tablet shipments surged past notebooks for the first time in Q3 and are projected to widen their lead in Q4, according to estimates of 18.2 million tablets versus 15.4 million notebooks for the quarter, Shim said.

The 7-8-inch category will emerge as the dominant tablet segment worldwide with 45 percent of market, or 108 million units, compared with 17 percent, roughly 41 million units, for the 9.7-inch category, DisplaySearch said. North America is expected to remain the largest market for tablets with 35 percent share, it said. China will move into second place, past EMEA (Europe, the Middle East and Africa), to secure 27 percent of the global tablet market on shipments of 65 million units fed by small local brands, the report said.

The declining demand for notebook PCs -- even in emerging markets -- will continue during the first half 2013, although the second half of the year could see a revival of the notebook market as new processors deliver more “tablet PC-like features” including instant-on, all-day battery life and sleek form factors, DisplaySearch said. “The tablet PC market saw increasing investments in North America in the second half of 2012, from major brands that tested not only new screen sizes and price points, but also unconventional business models to support their efforts,” Shim said.