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Steve Jobs was right – Its a world of Tablets with Laptops only a niche!

Posted in Industry updates by Manas Ganguly on January 10, 2013

NPD predicts that 2013 will see the first time that worldwide sales of tablets will surpass sales of laptops. NPD expects 240 million tablets to ship, but only 207 million laptops. That’s just the tip of the iceberg. By 2017, laptops are on track to shrink to just 27% of the mobile PC market.

In a market that has been dominated by Apple, shifting market dynamics are creating the opportunity for a greater variety of choices and screens, which will drive shipment growth in 2013 to 64% Y-o-Y (against 2012). In 2013, 7- and 8-inch tablets are expected to ship 108 million units. That’s a whopping 45% of the market. The 9.7-inch screen size of the traditional iPad is set to shrink to only 17% of the market. Undoubtedly, the huge surge in the 7inch devices is thanks to last year’s launch of the iPad Mini. While Apple is still facing stiff competition in the coming years, it will continue to do well in the market thanks to its brand awareness and high-quality ecosystem.

NPD Tab laptops

North America and China, the top two tablet markets, already saw tablets surpass laptop shipments last year. North America will remain the largest market with a 35% share (85 million units) in 2013. Having passed EMEA in 2012 to become the second-largest market for tablet PC shipments, China will have 27% of the global tablet market in 2013 with shipments of 65 million units, driven by small local brands. As the variety and demand for new screen sizes increases, so will market growth in emerging markets. As countries like China and India continue to modernize while growing their middle class, the demand for tablets will continue to grow at an amazing rate. The cost-to-utility ratio of tablets is clearly a winning formula for PC companies and consumers alike.

Tabs vs Laptops

Meanwhile, desktops and laptops are continuing their fall to niche status. When the vast majority of everyday tasks are handled on cheap, sleek, and portable devices, the need for a traditional computer peters out for most people. Notebook PC shipments have been slowed by declining demand worldwide, reaching even emerging markets where low penetration rates could have stimulated demand. However, increasing tablet PC adoption is stymieing notebook PC growth. The second half of 2013 may provide a respite as new processors aim to bring more tablet PC-like features, such as instant on, all-day battery life, and sleek form factors, to notebook PCs. If the NPD numbers hold true, we can expect a number of players in the traditional PC market to jump ship, and switch to making tablet and smartphones exclusively in the coming years.

The tablet markets saw increasing investments in North America in the second half of 2012, from major brands that tested not only new screen sizes and price points, but also unconventional business models to support their efforts. The subsequent increase in shipments and demand underscored the benefits of segmentation in the market as it drove rapid market expansion. In 2013, further investments are expected worldwide, stoking demand to the point that tablet PC shipments will exceed those of notebook PCs.

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