Tablet Market to More Than Double by 2016 Amid PC Slump

Tablet Market to More Than Double by 2016 Amid PC Slump

Global tablet sales, led by Apple Inc. (AAPL)'s iPad, will more than double to 282.7 million units in four years as consumers increasingly shun personal-computers in favor of smaller handheld devices, according to IDC.

Robust sales of the iPad, as well as new entrants powered by software from Google Inc. (GOOG) and Microsoft Corp. (MSFT), prompted IDC to boost its 2016 tablet forecast 8.1 percent from a prior projection of 261.4 million, the Framingham, Massachusetts-based researcher said in a statement.
The growth highlights a transition in the industry as more users turn to tablets for basic computing needs such as browsing the Internet, checking e-mail and watching video, a trend that has hurt sales of traditional PC makers including Hewlett- Packard Co. and Dell Inc. (DELL) Tablet sales will eclipse those of personal computers by 2015, according to a prediction earlier this year from Boston-based research firm Yankee Group.

"Tablets continue to captivate consumers, and as the market shifts toward smaller, more mobile screen sizes and lower prices points, we expect demand to accelerate," said Tom Mainelli, tablet research director at IDC, in the statement.

The PC market will shrink by 1.2 percent to 348.7 million units this year, the first decline in a decade, market researcher IHS iSuppli projected in October. In August, IDC said it anticipated that the PC market would grow less than 1 percent this year and reach 483.1 million units by 2016.

Microsoft Surface

Microsoft, which has been battered by the PC slump, introduced its Surface tablet earlier this year. Surface and other handheld machines running Microsoft's Windows operating system will command more than 10 percent of the market by 2016, IDC said today. This year, Microsoft's share is 2.9 percent.
The introduction of more tablets, including Surface as well as Apple's iPad mini and Google's Nexus device, prompted IDC to raise its 2012 tablet forecast 4.4 percent to 122.3 million units.

As more competitors crowd the market, Apple will lose share to devices using Google's software this year, IDC said. Apple's share will slip to 53.8 percent this year from 56.3 percent in 2011, while Google's portion will advance to 42.7 percent from 39.8 percent.

The shares of Cupertino, California-based Apple fell 6.4 percent to $538.79 at the close in New York, while Google declined less than 1 percent to $687.82.

By 2016, Apple will command less than half the market, with 49.7 percent. Google's share will slip to 39.7 percent.

"We continue to see Apple iPad as the dominant tablet," said John Bright, an analyst at Avondale Partners, in an interview. "The market is growing significantly enough to support multiple competitors."

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Apple Drops on Nokia China Deal, Google Tablets

Apple Drops on Nokia China Deal, Google Tablets

Apple Inc. (AAPL) shares declined the most in almost four years yesterday on concern that the company will lose ground in smartphones to Nokia Oyj (NOK1V) in China while giving up market share to Google Inc. (GOOG) in tablets.

Apple fell 6.4 percent, the biggest drop since Dec. 17, 2008, to $538.79 at the close in New York. The decline erased $34.9 billion from Apple's market value, the steepest loss since at least 1988, according to data compiled by Bloomberg. The stock has advanced 33 percent so far this year.

China Mobile Ltd. (941), China's largest wireless carrier, agreed to carry the Lumia 920T, a device based on Microsoft Corp. (MSFT)'s Windows Phone 8 software, the companies said in a statement. Though Apple has agreements with China Telecom Corp. (728) and China Unicom (Hong Kong) Ltd. to sell iPhones, the Cupertino, California-based company hasn't yet forged a deal with China Mobile in the world's largest mobile-phone market.

"Nokia announced that they are launching one of their Lumia phones with China Mobile, and there was some hope that Apple would launch their iPhone on that network," Gus Papageorgiou, an analyst with Scotia Capital Inc. in Toronto, said in an interview. "I think they still will, but they'll probably launch closer to Chinese New Year."

China's next lunar year begins Feb. 10.
Apple's slide also may be the result of traders predicting a drop after the stock failed to sustain a recent rally, a "classic technical breakdown," according to Gene Munster, an analyst at Piper Jaffray Cos.

Tablet Wars
Munster said new so-called margin rules also may have been put in place by some investors that could limit how many Apple shares a firm can own. Investors may also be disappointed Apple isn't issuing a special dividend like Oracle Corp. (ORCL), Wal-Mart Stores Inc. (WMT) and other U.S. companies, he said.

Apple is trading at a 39 percent discount to the Nasdaq Composite Index on a price-to-earnings basis, slipping from a discount of about 5 percent on Sept. 21, when the stock touched a record high of $705.07.

In another announcement that may have fueled the stock slide, research firm IDC said in a report yesterday that Apple's share of the tablet market will slip to 53.8 percent this year from 56.3 percent in 2011, while Google's portion will advance to 42.7 percent from 39.8 percent. Apple's tablet share will slip to less than 50 percent by 2016, as total global tablet sales more than double to 282.7 million units in four years as consumers increasingly shun personal computers, according to IDC.

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