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Are tablets heading the way of netbooks?

12/31/2014 at 9:46 AM by Brad Linder 78 Comments

Prices for Android and Windows tablets have been in freefall over the last year or two. These days you can pick up a Windows 8 tablet with an Intel Atom processor for as little as $60.

While that might sound like good news for bargain hunters… it could also be a sign that device makers are having a hard time moving all the tablets they’ve built.

Research from Flurry Analytics that looks at device activations over the recent holiday season seems to bolster that case: the team’s year-end report suggests that tablet sales are down while smartphone sales remain strong and so-called “phablet” or big-ass phone sales are on the rise.

So are tablets doomed?

winbook tw70

Maybe… it’s possible that people are buying fewer tablets, which is leading device makers to offer cheaper and cheaper models in hopes of making their products appealing… and that could lead to lower profit margins which will make tablets less attractive to manufacturers. Rather than continue to offer dirt-cheap hardware, they could decide to pull out of the space altogether.

That’s at least one explanation for the vicious cycle that led to the sort-of-death-of-netbooks a few years ago (although you could argue netbooks never died — they were just hibernating: recent small, low-cost notebooks and 2-in-1 devices like the HP Stream 11, Acer Aspire Switch 10, and Asus EeeBook X205 sure look a lot like modern iterations of the netbook concept).

But there could be something else going on: tablet sales might be slowing down not because nobody wants or uses tablets… but because tablet owners don’t feel the need to upgrade their hardware all that often.

If you bought a tablet a year or two ago and use it to surf the web, watch videos, read eBooks, or play games from time to time, you might be happy enough with the experience to hold onto that tablet for a few years. Meanwhile smartphone users, at least in the United States, are used to upgrading their phones at least once every two years when their service contract is up for renewal. So new smartphone activations remain pretty strong while tablet activations slow down.

flurry

Flurry points out another possible explanation though: In 2013 about 4 percent of new device activations were phablets. That number jumped to 13 percent in 2014, while tablet activations declined.

Instead of using a big-screen tablet for some situations and a small or mid-sized phone for others, Flurry’s figures could be evidence that some users are gravitating toward a single device with a nearly tablet-sized screen and the capabilities of a smartphone.

Apple’s launch of the iPhone 6 Plus with a 5.5 inch screen probably helped spur the growth of this segment. But Samsung, Motorola, and a number of Android smartphone makers also continue to offer phones with big screens.

Clearly there are a number of ways to interpret the latest trends indicated by Flurry’s report. And I doubt tablets are going to disappear overnight. But they could eventually become niche devices like eReader with E Ink displays, especially as some of the features that make tablets special start to find their way into big-screened phones, touchscreen laptops, and other devices.

via Slashdot

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MrJazz
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True, sales have leveled off, but that’s no indication that nobody’s using them. As stated above, the perceived need to upgrade tablets is far less than with phones. I’m still quite happy with my Nexus 7 (both 2012 and 2013) and use them daily. And it would take a pretty compelling reason to change that. So naturally, sales are down and prices drop. Once manufacturers find the proper production pace (and market segment,) I don’t think they’re going anywhere soon.

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4 years ago
jm2c
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What do you use both your Nexus 2012 and 2013 for daily?

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4 years ago
WillysJeepMan
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Good thoughts.

I think that the “race to the bottom” ended up splitting the netbook market into low-end netbooks and high-end netbooks (aka ultra-books). Lowering the bottom bar for pricing allowed for greater range of pricing that sandwiched traditional laptops and notebooks (in price points and functionality).

We might be seeing something similar with tablets. The leveling off of tablet sales and the increase in the number of low-priced Windows tabs is setting the stage for splitting the tablet market as well. We can see rumblings of this in the regular rumors of an iPad Pro, and to a lesser extent the increasing acceptance of the Surface Pro 3.

It won’t be boring, that’s for certain.

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4 years ago
NGenius
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Merely to stave off ARM Intel released piles of cheap chips onto the market and the result were these sub-$200 Wintablets which had no reason to exist otherwise (Chromebooks and Android tablets at least are fobbed off on the public for the greater goal of promoting the Play store). The Wintabs included the subsidized CPU part but any design/usability was treated as an afterthought

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4 years ago
CyberGusa
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No, these sub-$200 Wintablets were inevitable… Aside from the SoC they’re already using the same parts as their ARM counterparts and the cost of the SoC is a decreasingly small part of the total costs of a given device… There’s only a $15-$35 cost advantage between ARM and Intel SoCs, while subsidizing only goes up to around $50 per unit and that’s mainly to attract OEMs as well as be cost competitive to help establish market share… So Wintablets now going for $99-139 would still be below $200 even without subsidizing! There just wouldn’t be any sub $100 Wintablets without the subsidizing… It helps that MS is offering Windows on these devices for either discounted $15 or for free to help them better compete and Intel supports both Android and Windows on their tablets… So additional overhead costs are minimal compared to previous generation devices… Now the design and usability… Read more »

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4 years ago
Sumocat
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Netbooks originally had tiny screens, tiny SSDs, and were powered by tiny versions of Linux. The market crashed after vendors bloated them up to try to cram Windows into them. Now, vendors are sticking to that original formula with tablets (while still paying lip service paid to Windows) and going back to it entirely with Chromebooks.
And, of course, there’s Apple. Even if everyone else quits, Apple will still make money selling iPads.

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4 years ago
vvuuu
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smartphone sales remain strong and so-called “phablet” or big-ass phone sales are on the rise.this must incense all you people who rant about ” oh nobody needs a smart phone over 4 inches thats stupid” AGAIN mind your own freekin business!!!

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4 years ago
realjjj
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Excluding China: Prices haven’t dropped this year. Windows tabs sure because both M$ and Intel are pumping billions into that.But you also get crappy hardware for it. The real problem is the very poor products we’ve been getting this year. Prices got stuck or even went up in the 100- 200$ range for Android in the West. Some regional and local vendors pushed prices lower but they focused on low res and same old A7 core. The design is lacking too. Sure China is a hell of a lot more alive and Apple has been far more aggressive in Q4. We are also getting A53 cores but Intel might keep the Western tablet market under it’s boot, crappy products helps them sell costlier chips in PC. Phones will only really kill tablets when we have flexible and strechable screens but the very very poor product offerings are to blame. Amazon… Read more »

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4 years ago
brian
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agreed about samsung. it seems like they are too closely following in sony’s footsteps. people really don’t have that much brand loyalty.

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4 years ago
realjjj
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I guess i was in a rush to point out the negatives and forgot that there are some positives. There are some objective factors for tabs being neglected. The market is much smaller than the phone market and prices (and margins) dropped sooner than for phones. The good news is that it can change. If phone prices are crashed by the China guys, there won’t be much of a margin difference between phones and tabs and more phone makers will make tablets. This year A53 SoCs clocked at decent speeds are a nice gain in perf over A7 and 1080p 5.5 inch phones becoming the midrange in China should help 1080p tabs become more available. Later on maybe we get some big custom cores (like 4 Nvidia Denver cores on 20nm or 16nm ) and 4k screens pushing sales in the high end but 500$ is too much for a… Read more »

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4 years ago
Kary
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I bought the original Nexus 7 on launch, before I moved up to the larger screen of the Samsung S4. Before buying the S4 I thought I’d want another tablet (one for me, one for my wife), but after getting the S4 I hardly use the tablet, and my wife mainly uses it as a Kindle. Based on my experience, someone with a phablet would have little need for a tablet.

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4 years ago
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First, the one device that trumps tablets and computers in general now a days is the smartphone / cellphone. EVERYBODY has a device that plays music, takes pictures, browses the Internet in some capacity, might include a GPS, flashlight, read/compose emails, texts, chats, etc…They also carry this with them on their persons the majority of the time because they’re so portable and convenient. Phones now do a whole pile of stuff and for the majority of media consumption on the go, they can’t be beat. Second, with Windows 8 being a bomb in the minds of users on the desktop, people simply aren’t buying their tablets. Cheap or not, few people really care about it. Now I know there are people out there who will scream bloody murder and call me names because they love them so much, but so what. The market has ignored Windows 8 on tablet and… Read more »

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4 years ago
CyberGusa
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Be careful what you call facts, the market hasn’t ignored W8… there’s a difference between not being a raving success from actually doing badly… For some, it’s just that nothing short of a raving success can be considered a success but the market share of W8 did grow since its release and devices like the Asus Transformer Book T100 have exceeded sales expectations, competing well with Chromebooks, and those are facts! There’s just also a high level of biased opinion on W8 and that distorts many views and perceptions… But people have a distorted view of Windows in general… Like most don’t seem to remember it took nearly 3 years for XP to really take off… Mind W8 hasn’t even been around half that long yet… never mind how people resist change in general to begin with… That said, you aren’t that wrong on how people’s opinion of W8 has… Read more »

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4 years ago
jb82
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More that the market is flooded with them, everyone has one and manufacturers churn so many out each year expecting us to switch every 6-12 months. A lot of people hold on to the ones they have already bought and many have found that they just don’t need or use them often.

Plus I think many people who want windows tablets want something more powerful rather than a cheap compromised tablet. The first wave didn’t have simple things like hdmi out. The second wave decided 16gb of storage and 1gb of ram was acceptable and moved to budling in office 365 instead of the better non subscription office. Pen input has vanished in a drive to get cheaper.

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4 years ago
Red Right Return
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Tablets aren’t going anywhere.

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4 years ago
Graham_Douglas
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Agree. Ecosystems are depend on that fact. Which is why, is the market dries up, tablets will be free giveaways. Like you get one for consuming air or drinking water.

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4 years ago
Red Right Return
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The cheap ones maybe, but there is still some innovation in tablets we will see in the next two years which will have people buying new ones. Apple tablets retain their value more so than other tablets, which is why you see some tablet market decline – they don’t need to be replaced. Android tablets are frozen until Lollipop is in wide release, and finally, the cheap Windows tablets weren’t as big as the silly execs thought they would be – any power-user knows better than to buy a device with Windows and less than 2GB RAM and 32GB of storage – 64GB is the preferred. The Windows tablet market took a step back this year, but I think next year we will see a growth there.

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4 years ago
Graham_Douglas
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I guess I would respectfully disagree with innovations in the tablet space. It’s a slab. Battery, camera, screens, processors can improve, but I don’t see those as being game changers. Detachables already exist. I can’t see the future, but it’s hard to see how such a device can really evolve from what we have now.

I do agree with your take on Apple tablets.

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4 years ago
Red Right Return
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Battery and Processors are always an innovation. For Windows tablets, improving battery life and processing power is a huge game-changer. I’m sure we will see other innovations as well.

Not that you said this at all (more in response to the original article), but I also find the idea that tablets would be replaced by phones to be ludicrous. Maybe for some folks they like to watch their movies on a phone, but a great deal of us use larger tablets for consuming media and reading. Using a tablet-size phone is silly, just like using a tablet as a camera. I’m all for converged functionality devices, but there is a lot to be said for form factor and use case.

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4 years ago
Logik
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Nice article.
A Device is introduced; sales boom; market gets saturated unless there are major reasons to upgrade. I was reading recently about the introduction of automatic washing machines after WWII: huge demand, big profit margins, many companies entering market – and 6 month waiting times for a washer. Demand and makers (and profit margins) are way down over a half century later, but that is not a sign of the death of washing machines.
As Sumocat points out, early Netbooks were small, had SSDs, and ran a free OS not compatible with desktop Windows apps. Other hallmarks of the breed: relatively low-powered, and CHEAP! Primary use: connect to web. So I would say the Netbook is alive and well, and now has a Google logo: Chromebook.

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4 years ago

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