The tablet as we know it is reaching paralysis, and here's why

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You've been reading it everywhere - tablet sales are plummeting. The first quarter of 2015 is the second consecutive quarter in which tablet shipments are falling. To be more specific, analyst powerhouse IDC says shipments fell to 47.1 million in Q1, which is a 5.9% decline from the same quarter a year ago. Even Apple, the tablet's years-long stronghold, is feeling the recession. According to its Q2 2015 earnings report, Apple sold 21.4 million iPads throughout the period — a sobering 21 percent drop from the same time one year ago.

The drought from 2015 follows a slowdown from the last quarter of 2014, which saw 76.1 million tablets shipped worldwide, compared to 76.9 million from Q4 2013. This may not seem overly dramatic, but considering that up till last year, tablets were on a solid year over year growth streak and also the fastest-growing category of consumer devices ever invented, the tablet market is, indeed, in poor shape. This is a full six months of falling sales. While the market was escalating in double digit percentages on a yearly basis, it looks like that pace was ultimately unsustainable.

How did we get to this? It's nothing overly complicated, really. Reality itself is all there's to it!

The market is saturated


The original iPad's arrival in 2010 defined the modern tablet and created the market for it. That's quite the accomplishment, but mind you, we're not saying that the iPad is the "first" tablet that it certainly wasn't. But it was the first of its kind that gave users exactly what they, knowingly or not, wanted - light, portable, app-based computing & media on a big touchscreen.

After Apple's historical keynote (Jan 27 2010), Android device vendors knew they had their work cut out for them. The fruits of their labor came promptly, mere months later, but the first generation Android tablets were quite expensive, yet not convincing in their design and performance characteristics. Android lacked the polish of iOS, and with some exceptions, Apple was privileged to the best technological components at the time. Fair and square, but just a year later, competition in the Android tablet market had blown up huge! Because people demand tablets, and because Android is free, there was an abundance of screen size and price choices to consider from all kinds of leading and low-brow brands.

Speaking of price, Amazon played a key role in pushing the Android tablet into the spotlight (especially in America) by launching the $199 Kindle Fire. After October 2011, a tablet of good quality was no longer a luxury expense priced upwards of $400, but rather a $199 device you order from Amazon. Obviously, the competition had to react - it reacted predictably by targeting lower prices, and the ensuing race to the bottom made a sheer variety of Android tablets available at price tags that eventually slipped below $100. If you aren't a power user, and the overwhelming majority of users aren't, even these can be quite decent these days. Same goes for Windows tablets. Nowadays, Windows is free for devices with screen sizes below 9 inches, and Intel is subsidizing their manufacturing expenses, so buying a dirt-cheap Windows 8.1 tab is also an option.

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The point of this succinct history lesson is that, over the last couple of years, most users who wanted a tablet, be it from Apple or device vendor X, have already gotten one for themselves, and perhaps even one for their friend, relative, pet, or fiance if they wanted to. The result is a bunch of happy customers representing a market densely saturated with users who already have a tab, are fine with it, and couldn't care less about the new devices on the shelves. That last bit alone is worthy of a closer examination, which we'll do in the coming paragraphs.

Carrier support is weak


Most users, especially those in America and other countries where carriers heavily subside smartphones, don't shop for unlocked smartphones - especially if it's expensive $600+ flagships we're talking about. They sign a two year contract, enjoy their device, and when the deal's up or beginning to expire, most of them feel genuine interest in upgrading to that hot new gadget. Hence, smartphone sales are guaranteed more stability.

Tablets, though, are a different story. You are well aware that carriers sell smartphones (at cost) because they are selling their service alongside them. To sell and subsidize tablets, carriers also have to sell data plans for cellular tabs, likewise. But the trouble is, not that many people buy cellular tablets. The reasons? They are significantly more expensive, tablets are generally perceived as household devices (where Wi-Fi and family sharing thrives), and oh, what do you know - most tablet owners are already paying for a smartphone and data plan, so they don't feel like servicing another device. While we're at it, there's plenty of free Wi-Fi outdoors, and smartphone tethering works like a charm, anyway.

If you are marketing tablets for a living, we'd imagine you are quite frustrated. Alas, there's more where that came from...

Lack of innovation


With a few exceptions, tablet announcements from the past two years have been a giant snoozefest. All the iPad has had going on for itself is becoming progressively thinner, along with the usual yearly performance boost. But save for speed, the prettier screen, and the ability to run complex 3D games, there's hardly anything the iPad Air 2 can do for you that even the ancient iPad 2 can't. Both have the same core functionality. That's about to change with iOS 9, though, as the iPad Air 2's ample 2GB of RAM will allow it to pull off some heroic multitasking. But that's about it. Be assured, many will keep holding on to their older iPads and iPad Minis, because they are content with them and cannot justify the upgrade toll.

Android & Windows tablets are stuck in a bigger rut. The lower you go down the price ladder, the deeper you venture into a wormhole of anonymous slates. Most of them seem like afterthoughts of a manufacturer who's merely exercising its tablet-making muscles to prevent atrophy and keep up with the guys. Meanwhile, high-end Android tablets suffer from the same problem as the iPad - they can't excite users and initiate upgrades. If the Sony Xperia Z2 Tablet was an impeccably designed, waterproof, specs-intense tablet from 2014, then the new Sony Xperia Z4 Tablet is the exact same product, only from 2015.

Same goes for the freshly announced, and openly iPad-like Samsung Galaxy Tab S2 duo - without a doubt, Sammy's new tablets are better engineered than their last year Galaxy Tab S counterparts, but we cannot identify upgrade-worthy user experience improvements. In fact, some of our readers are arguing whether holding up for the inevitable Galaxy Tab S discount isn't a smarter move than buying the brand new tablet. Software seems to be the missing link in the yearly upgrade cycle that nobody seems to talk about. Instead, brands like Lenovo are throwing in pico projectors and touchscreens that sense input from cutlery. Business people probably like projectors, but mass users can't be bothered - they've already got big LED TVs.


Moreover, the price differences between low, mid, and high-end tablets are now bigger than the usability differences between them, which makes for a rather poor positioning of premium tablets on today's market.

Slow replacement cycles


Initially, device makers expected users to upgrade tablets like their smartphones, every two to three years on average. Only it turned out that wasn't the case, for a variety of reasons that even a trained astrologist would have had a hard time predicting. We profiled the lack of innovation already – a major contributing factor to slow upgrade cycles. But there's more to it than just that. Generally, tablets are pampered household items. They don't go through the daily grind of living in your pocket, on your desk, and in your car quite like smartphones do. And when you do take a tablet outside, you're usually carrying it in a hard cover case - suitable for a tablet, mostly inconvenient for a smartphone.

Tablets' large batteries, coupled with the moderate daily use, don't go through as many charge cycles as phone batteries do, hence they last quite a bit longer. Meanwhile, bigger vendors such as Apple and Samsung do a really good job keeping their aging devices current with software updates. In the end, if you are the typical user, then the tablet you bought years ago is still good enough for you. Either that, or you've moved onto your phablet!

Phablets are filling in for tablets


Let's not forget the big elephant in the room - phablets! Following the Samsung Galaxy Note's introduction, the phablet has seen nothing short of tremendous success. Each year, more and more devices with screens at and above 5.5 inches per diagonal are contributing to cumbersome rectangular bulges in users' pockets. A study by analytics firm Flurry found that 20% of the 1.6 billion devices it tracks in 2015 are phablets, while this percentage was 6% just a year ago. More evidence? A Forrester Research survey discovered that 41% of global information workers are using a smartphone with a screen larger than 5-inches. 11% of those surveyed told Forrester that their primary tablet is actually a phablet. Heed these words, for we'll return to them later.

Needless to say, somebody has to move away to make room for that kind of phablet growth, and that somebody is the good old tablet - especially where Android is concerned. According to the same data, phablets account for 27% of all Android devices, while tablets powered by the robot Google built have a whopping 3% user base. Where does that leave us? Well, it leaves us at the staggering conclusion that users looking for a big-screen Android device are buying phablets, not tablets. Why is that? Well, for starts, phablets are treated by carriers no different than smartphones, which means they are guaranteed to sell better, even if they too aren't exactly treated to the kind of spectacular innovation that moves people into "shut up and take my money" mode.

When there's Android, there's iOS too, so how is the long-in-the-coming introduction of the bigger-screened iPhone 6 and iPhone 6 Plus impacting Apple's iPad sales? Well, a study by the makers of Pocket shows that the surveyed people who own both the iPhone 6 Plus and an iPad reach to the former for their multimedia consumption 80% of the time. That's probably because reaching for the big-screen iPhone in your pocket is so darn convenient. To those 80%, their phablet has become their tablet for all but the most niche intents and purposes. And that's bad news for iPad salesmen.


Conclusion


Starry-eyed journalists and analysts who enthusiastically proclaimed tablets as "laptop killers" have been forced to realize the obvious truth that they have clumsily evaded since the beginning - tablets are primarily multimedia consumption devices with limited productivity options. During the time they've been on the market, nobody that I know of has thrown out their laptop, or kept showing up to work with just a tablet and keyboard dock for longer than a few weeks, before quitting in frustration. There goes the "laptop killer".

That's not to say tablets aren't great. They are, but they are in a difficult spot right now, because people aren't buying them like they used to, and manufacturers are uncertain. But there is light at the end of the tunnel - business users. Tablets make for excellent enterprise devices due to their connectivity and portability strengths. No wonder Lenovo is adding projectors, or that Apple is reportedly putting the iPad Air and Mini on the back burner this year to give the spotlight to the iPad Pro.


Moreover, IDC claims that growth in the 2-in-1 device space, occupied by the likes of Microsoft's Surface Pro or Lenovo's Yoga convertible laptops, has been "stunning", despite hybrids accounting for a relatively small market share. They represent good value to those looking to replace their laptop or aren't completely sold on the virtues of a regular tablet. Which makes it clear that the tablet as we know it has ran out of steam, and needs to evolve, adapt, or become something altogether new to sustain itself.
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