Tablet market slump persists in Q3 2016

The worldwide tablet market continued its slump as vendors shipped 43 million units in the third quarter of 2016 (3Q16), a year-over-year decline of 14.7 per cent, according to preliminary data from IDC.

In contrast to the annual decline, Q3 2016 shipments were up 9.8 per cent over Q2 2016 as larger vendors prepared for the holiday quarter.

Low-cost (sub-$200) detachables also reached an all-time high as vendors like RCA flooded the market.

"Unfortunately, many low-cost detachables also deliver a low-cost experience," said Jitesh Ubrani, senior research analyst with IDCs Worldwide Quarterly Mobile Device Trackers.

"The race to the bottom is something we have already experienced with slates and it may prove detrimental to the market in the long run as detachables could easily be seen as disposable devices rather than potential PC replacements," commented Ubrani.

"Beyond the different end-user experience delivered by low- and high-end tablets, were witnessing real tectonic movements in the market with slate companion devices sold at the low-end serving a broader platform strategy, like Amazon is doing with Alexa on its Fire Tablets, and more expensive productivity tools closer to true computing and legitimate notebook replacement devices that should manage to keep average prices up," said Jean Philippe Bouchard, research director, Tablets, IDC.

Although Apples tablet shipments declined 6.2 per cent year over year, total iPad-related revenues were flat for the quarter, thanks to the iPad Pro offering.

Samsungs attempt to enter the detachable market with its TabPro S at the beginning of 2016 seems to have taken a backseat as its price and positioning remain uncompetitive.

Amazons new Fire HD 8 released in early October will likely perform well in the holiday quarter as it follows Amazons strategy of selling low-cost tablets as a gateway and companion to its ecosystem. It is important to note that Amazons unprecedented growth is partially attributed to the fact that IDC did not include the 6-inch tablets offered by Amazon in Q3 2015.

Lenovo has many aspirational products across all its entire consumer electronics portfolio, none were enough to raise the companys profile in the tablet market, resulting in a 10.8 per cent decline this quarter.

Huaweis offers a very strong value proposition as many of its tablets (over two-thirds) come integrated with cellular connectivity while maintaining a similar price to rivals who only offer WiFi-enabled devices. Huaweis presence in Asian, European, and Middle Eastern & African markets remains strong.