'Cannibal' tablets take over

Worldwide media tablet sales are set to increase by 181% in 2011, with growth driven by the iPad, says Gartner.

It says end-user sales will reach 19.5 million units this year, and are projected to total 54.8 million units in 2011, up 181% from 2010. Sales in 2014 are predicted to reach 208 million units.

The research firm adds that in 2010, celluar/WiFi media tablets will account for 55% of sales, and by 2014, they will account for 80% of sales.

Gartner analysts say the impact of media tablets on other devices will vary among segments.

“The all-in-one nature of media tablets will result in the cannibalisation of other consumer electronics devices such as e-readers, gaming devices and media players,” says Carolina Milanesi, research VP at Gartner.

“Mini notebooks will suffer from the strongest cannibalisation threat, as media tablet average selling prices drop below $300 over the next two years.”

She adds that low-end consumer notebooks will only marginally suffer from this effect. Analysts also expect limited cannibalisation on communication devices based on open operating systems, like smartphones.

“The majority of the impact will be from seven-inch media tablets on high-end smartphones, as it will be hard for a user to justify owning both when the differentiation in usage model is very limited. Users buying a seven-inch tablet might opt for a lower priced smartphone with a smaller form factor.”

Gartner says as costs decrease and as media tablets move from early adopters to mainstream, they will become a family purchase, as well as a personal one.

“The touch user interface, the applications available on the different operating systems and the simpler set up compared to a full-fledged computer make media tablets ideal for a range of consumers: from power users to techno-phobics.”

Communication service providers who have so far subsidised mini-notebooks to drive mobile broadband uptake will shift their marketing spend to media tablets. Such subsidies will help drive adoption among those consumers who see the initial hardware cost as a hurdle, says Milanesi.

“For the rest, the freedom of paying for cellular only if and when needed, and not having to add another contract to the one a user might already have on his or her phone, is a great advantage and has so far proved successful for Apple.”

Gartner already said global computer sales did not meet its expectations.

Sales improved by 7.6% in the third quarter of the year, compared with a year ago. However, the figures were below Gartner's expectations.

The firm had expected third-quarter shipments to improve by 12.7%. Mikako Kitagawa, principal analyst at Gartner, says the quarter is traditionally a strong period led by back-to-school sales.

In the Europe, Middle East and Africa (EMEA) region, PC sales grew at a slower rate than worldwide sales, with total shipments of 27.3 million units, a year-on-year increase of 7.3%.

“The single-digit growth experienced in the third quarter signals a slow down in the EMEA PC market after a very strong first half of 2010,” says Ranjit Atwal, research director at Gartner.

Gartner does not provide figures on sales in the South African or African markets. However, Hannes Fourie, senior analyst of systems and infrastructure solutions at research house IDC, previously indicated the local PC market is worth R1.5 billion a year, a figure that is expected to grow to R1.8 billion by 2014.