Tablets exceed analyst expectations as PCs falter

Posted by Trent Nouveau

Worldwide tablet shipments have outpaced analyst predictions by racking up an impressive total of 52.5 million units worldwide in the fourth quarter of 2012 (4Q12).

Indeed, the tablet market grew approximately 75.3% year over year in 4Q12 (up from 29.9 million units in 4Q11), increasing a staggering 74.3% from the previous quarter's total of 30.1 million units.

"We expected a very strong fourth quarter, and the market didn't disappoint," explained IDC analyst Tom Mainelli.

"New product launches from the category's top vendors, as well as Microsoft, led to a surge in consumer interest and very robust shipments totals during the holiday season. The record-breaking quarter stands in stark contrast to the PC market, which saw shipments decline during the quarter for the first time in more than five years."

As expected, Apple's iPad once again led the market, with a strong iPad mini launch and a fourth-gen full-sized iPad accounting for a solid 48.1% shipment growth over the same quarter last year. However, strong competition in the tablet market prompted Apple's market share to decline for a second quarter in a row (down to 43.6% from 46.4% last quarter).

Meanwhile, number two vendor Samsung posted 263% year-on-year growth, shipping nearly 8 million combined Android and Windows 8 tablets to corner 15.1% of the market. Amongst the other top 5 vendors, Amazon and Barnes & Noble both saw their market share increase sharply as new products gained traction during the holiday season.

To be sure, Amazon managed to ship more than 6 million tablets during the quarter, increasing its share to 11.5%, up from 8.3% the previous quarter, with year-over year growth of 26.8%; while Barnes & Noble shipped close to a million units, increasing its share to 1.9%, up from 0.7%,.

Number four Asus saw its share slip from 7.8% to 5.8% despite continued strong shipments of its Google-branded Nexus 7 tablet and the highest year-over-year increase in the top five at 402.3%.

Finally, Microsoft entered the market during the quarter with its Surface with Windows RT tablet, but failed to reach the top five after shipping slightly less than 900,000 units.

"There is no question that Microsoft is in this tablet race to compete for the long haul. However, devices based upon its new Windows 8 and Windows RT operating systems failed to gain much ground during their launch quarter, and reaction to the company's Surface with Windows RT tablet was muted at best," explained IDC analyst Ryan Reith.

"We believe that Microsoft and its partners need to quickly adjust to the market realities of smaller screens and lower prices. In the long run, consumers may grow to believe that high-end computing tablets with desktop operating systems are worth a higher premium than other tablets, but until then ASPs on Windows 8 and Windows RT devices need to come down to drive higher volumes."