18 Nov 2016

Some Things You Didn't Know about the Tablet Market

People say that tablets are in decline, but they're actually selling more units every year:

Notice that tablet sales have been increasing every single year. While both laptops and desktops are both declining almost every year. Laptops and desktops put together, which I'll call PCs, are now down to 50% of sales, with tablets constituting the remaining 50%.

So, when people say that PCs are dead, or that tablets are dead, both views are wrong. Accounting for half the market isn't dead by any stretch of imagination.

Let's look in detail at one brand of tablets — iPads. Fewer iPads [1] were sold this quarter as compared to the previous quarter. Which was, in turn, less than the number two quarters earlier. And so on for 10 quarters [2] [3]:


Putting together the two graphs, if tablet sales are increasing, and iPad sales are decreasing, that means iPads are losing market share to other brands of tablets.

But the iPad isn't not losing market share to the Mac. Roughly twice as many iPads as Macs were sold last quarter:

In summary, tablet sales have increased, while PC sales have decreased, so they're even now. Both tablets and PCs are successful and important. Neither is "dead". Looking at one particular brand of tablets, iPads, sales have declined, but iPads still outsell Macs roughly 2:1.

[1] I'm measuring the number of iPads sold, as opposed to revenue or profit. Dollar numbers are relevant only if you're an investor in Apple. If you want to measure whether iPads are succeeding, and their broad impact on the industry, the relevant metric is number of units.

Actually, more relevant than sales is the number of active users, but unfortunately that information is harder to get.

[2] This graph shows a trailing average of four quarters, to hide the seasonality. iDevice sales always spike for one quarter a year, when there's a new model. That adds a lot of noise, making it hard to see the long-term trends amidst the quarterly noise. I eliminated the noise by taking a trailing average of four quarters, letting you see the long-term trend.

[3] One explanation is that iPad replacement cycles are much longer than expected, much longer than that of phones, so once most people who were interested in buying an iPad bought one, the market was saturated, so sales declined for years, since there was no need to buy another. After many years, the old iPads need to be replaced, so sales may increase again. Apple predicts that that will happen next year.

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