Forecasts & Hype vs. Actual Tablet Shipment

The initial forecasts for tablet PCs were mouthwateringly high. Shipments were expected to rise “by a factor of more than 12 from 2010,” according to estimates provided in February by market researcher {complink 7427|iSuppli Corp.} The company said it expected global tablet sales to rise to 242.3 million units in 2015 from a mere 19.7 million units in 2010.

The giddy numbers sparked frenzied attention in the market and lured traditional PC OEMs as well as smartphone manufacturers. Today, the market is awash in tablet PCs from {complink 379|Apple Inc.}, the current market leader, and other contenders for its crown, including Dell, HP, HTC, Motorola Mobility, Research in Motion, and Samsung. Companies like Nokia that were late to enter the fray have been pummeled in the marketplace, heavily criticized for not foretelling and preparing for the explosive growth of a new industry sector.

However, the initial forecasts are getting a trim. Although demand for tablets is still rising strongly, it's obvious the market is not expanding at the rate many had expected, a development that has some significance for the components vendors salivating over the sector and their OEM customers. In a report issued July 8, IDC said media tablet shipment in the first quarter tumbled 28 percent from the previous quarter. The decline was more than expected, even for the seasonally slow first quarter, and could be attributed to continued consumer concerns about the strength of the global economy, according to IDC.

It could also be a sign the product may not be keeping the traction it gained when Apple sparked interest in tablets with its first iPad. Let me speculate further by saying the development might also be linked to other factors, such as pricing (at $500 or more, tablets are still pricier than e-readers, for instance). Personally, I wanted a tablet PC last year but held off buying one until I had seen additional offerings; then, I decided my two laptops were serving me well enough and I didn't need an extra PC-like product. This opinion was reinforced during a recent trip, during which my laptop delivered service a handheld tablet would not have managed. I may still get a tablet, but the itch has subsided.

Could other consumers be similarly wary about spending so much money on a tablet device? It's possible, and component makers as well as OEMs need to take this into consideration. Certainly, this is still a huge market; even IDC raised its “forecast for 2011 to 53.5 million units from a previous projection of 50.4 million units,” which could mean the lower first quarter shipment was a hiccup the research firm expects the industry to quickly overcome.

But here is my concern: The industry may be setting itself up for sales that may not materialize or come in substantially below forecast. Take the memory or DRAM market as an example. iSuppli estimates surging sales of tablets will light a fire under the DRAM market in 2011, pushing up shipment “by a factor of nine.”

Mike Howard, an analyst at iSuppli, says: “Because of their soaring shipments, tablets are gaining increasing prominence in the DRAM market. The iPad, which has single-handedly dominated the tablet business since its introduction last year, will account for the bulk of the DRAM demand in the market in 2011 and the following years. However, competition to the iPad is seeping into the market, driving further DRAM demand.”

Naturally, memory product-makers may be ramping up production for this expected increase in demand, but what if instead of “a factor of nine,” actual demand comes in at a factor of five or six? A lot of products will sit on somebody's shelf. Similarly, In-Stat is projecting huge increase in demand for other silicon and non-silicon parts used in the production of tablet computers.

“Without question, tablets are driving the increases in silicon TAM (total available market) in portable entertainment devices,” says Stephanie Ethier, an analyst at In-Stat. “Global sales for tablets are on the rise as a result of continued consumer demand, global expansion of tablets and a wider adoption of these devices beyond early adopters. In 2015, tablet and e-readers silicon will account for nearly 85 percent of all silicon content dominating the category.”

Yummy, isn’t it? Let's just hope the forecast is as true as it sounds — otherwise, somebody is going to rue pouring too many resources into this segment.

10 comments on “Forecasts & Hype vs. Actual Tablet Shipment

  1. Nemos
    July 13, 2011

    “Could other consumers be similarly wary about spending so much money on a tablet device?”

    Spending 500$ to buy a tablet device it is a lot of money and comparing with a laptop the only thing you get more as an advantage is in the size (tablet is much smaller than a laptop).). Of course, the fashion tends to the tablet, and it is a factor that influences the consumers.

  2. elctrnx_lyf
    July 13, 2011

    I was fascinated by the tablets when the ipad came out initially. But I plan to wait for some time to because i want to have the best tablet. But slowly I understood that my smart phone can do everything that a tablet can do except the little bigget size LCD. But I do not think there is any end to tablets. This is truly a media consumption device but definitely a useful for college going students and among the sales teams.

  3. Ms. Daisy
    July 13, 2011


    I am one of the wary concumers that is now doing “cost benefit analysis” of my excitement to own an ipad, the reality of what I truly need vs. the hype of buying the tablet. I agree that $500 truly is a lot for the use I will get out of the tablet. I am therefore leaning towards a laptop for the same value. My smartphone is doing just fine and RIM is giving out free apps to enhance my smartphone capabilities. So I am not joining the hype for now!!

  4. Barbara Jorgensen
    July 13, 2011

    I do think that consumers are holding off on buying tablets: first, the cost but second, there are so many versions flooding the market that I think consumers are waiting for the inevitable shakeout. I think the success of the iPad is purely Apple-driven: Apple fans will buy anything the company puts out no matter what, and the rest of the market waits until iPads come down in price or a contender establishes itself as the leader.

  5. jbond
    July 14, 2011

    Other than cost, I think the biggest problem with tablets right now is way too much competition. Other than the Ipad, which any Apple fan will buy, many other consumers have way too many choices. It seems like every day a new manufacturer comes out with a tablet that is supposed to be better than the others. Until the hype dies down and the true competitors stick around, there is going to be a lot of people holding off on their purchases. At $500 you can get a great loaded lap top.

  6. Piplzchoice
    July 14, 2011


    One of the reasons why there is more hype than shippments is that the only tablet so far that provide consistent user experience is the iPad and the Android tablets do not measure up. The disclaimer – I am not an Apple fanboy and have never purchased an Apple product, even though I admire their marketing brilliance. It is interesting to note an early trend – customers see to report higher satisfaction with tablets that offer propriatory operating system, such as RIM's Playbook, HP TouchPad and Apple iOS. Our study, based on analysis of 6,413 customer reviews published online on or before July 1, 2011 on popular websites like Amazon, Best Buy and,  shows this trend quite clearly. 



    For more details follow


  7. eemom
    July 15, 2011

    I totally agree with Barbara.  Apple fans trust their product and are eager to go purchase any new “toy” and perhaps don't mind paying a premium.  When others enter the market, they are expected to be cheaper, for those who can't afford the real thing.

    One question that comes to mind is what was the original forecast was based on?  It seems an insane level of growth for a new product.  Maybe what we are seeing now is a more realistic level rather than the overly optimistic original forecast-ed.

  8. stochastic excursion
    July 15, 2011

    Overlap in capability is no doubt a problem for the iPad and other tablets.  Getting something that does the work of a laptop and a smartphone, when many people have more than one laptop and smartphone, takes a lot of rationalization.

  9. eemom
    July 15, 2011

    True enough, although I would argue that the tablet does not totally take the place of a laptop.  There is no way I am able to do the work I do on a laptop with an iPad.  It also does not include all the smartphone capability since you can't text or make calls.

    I would say that it has a little of each functionality but falls short of replacing either one.

  10. itguyphil
    July 17, 2011

    It seems like a great companion device when you're on the move but the laptop is still an essential to get a majority of your 'real' work done in many environments. But I think there will still continue to be a steady increase in the tablet adoption and utilization.

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