Hold on to your laptops and desktops, because in the not-too-distant-future they may become collectors' items. A new report from IDC projects that shipments of tablets will exceed those of PCs in the fourth quarter of this year, for the first time.
This transition parallels smartphones' topping feature phones in the second quarter, which and others recently reported. Overall, the smart connected device market, which includes PCs, tablets and smart phones, is forecast by this IDC Worldwide Quarterly Smart Connected Device Tracker to grow 27.8 percent this year compared with 2012, while the PC growth rate drops by 10 percent.
For the entire year, PC shipments are still expected to be greater than tablet shipments in 2013, but the upward trend is projected to continue until tablets exceed PCs on an annual basis by the end of 2015. By that year, smartphones will account for almost three-quarters of all smart connected devices on the planet.
A Game Changer
PC shipments accounted for 28.7 percent of last year's smart connected device market, compared with 11.8 percent for tablets and 59.5 percent for smartphones. By 2017, PCs are projected to drop to 13 percent, tablets will rise to 16.5 percent and smartphones, 70.5 percent.
The overall growth rate for the worldwide smart connected device market is expected to be 10.6 percent this year, but the upward trend will not continue forever. IDC expects this market to slow down to a growth rate of 3.1 percent by 2017, as lower-cost smartphones and tablets begin to saturate the markets. For 2013, for instance, the research firm predicts that nearly 70 percent of the smart connected device market will be smartphones and tablets priced under $350.
IDC Research Analyst Megha Saini said in a statement that, "at a time when the smartphone and tablet markets are showing early signs of saturation, the emergence of lower-price devices will be a game-changer." Saini said the introduction of new, cheaper handsets and tablet devices, as well as initiatives like trade-in programs from Apple and Best Buy, "will accelerate the upgrade cycle and expand the total addressable market overnight."
New Kinds of Cannibalization
The new, low-cost iPhone 5c, introduced this week by Apple, is one of the most visible examples of this new low-cost trend. But some observers have already criticized the technology giant for not releasing an even lower-priced handset that could keep up with the downward pricing trend. The $99 5c requires a two-year phone contract or, if you prefer, will run between about $550 and $650 for unlocked models.
New kinds of cannibals are also appearing. That is, a new round of device cannibalization is projected to take place, such as smartphones with screens of 5 inches or larger beginning to overtake sales of 7- to 8-inch tablets. IDC noted that, over the last two years, much attention has been paid to tablets cannibalizing PC sales, but the next 12 to 18 months will be more oriented toward larger, "phablet" smartphones beginning to replace the lower-sized tablets.