Tablet Shipments Fell 12% In Q4 2014, Its First Decline Ever, Says Canalys

As phablets become more popular, consumers are waiting longer to upgrade their tablets or eschewing them altogether. As a result, worldwide tablet shipments plunged 12 percent year-over-year to 67 million units in Q4 2014, which research firm Canalys says marks its first ever decline after several quarters of slowing demand.

Canalys’ findings are similar to a report by IDC that predicted tablets would see their first shipment decline at the end of 2014.

Last quarter was the fourth in a row that Apple’s year-on-year tablet shipments have declined since the temporary boost it received in Q4 2013 when the iPad Air was first launched. In Q4 2014, Apple’s tablet shipments fell by 18 percent, while rival Samsung’s dropped by 24 percent.

One of the reasons for the decline in shipments is the fact that many customers who purchased tablets at the end of 2013 were in no hurry to buy new devices.

Furthermore, phablets—especially the iPhone 6 Plus—were the big winners during the holiday season, as noted in a report last month by Flurry.

But despite smaller shipments, Apple’s ecosystem helped it gain 30 percent of the market in Q4 2014, said Canalys. Samsung, on the other hand, did not do as well because its shipments were impacted by inventory issues.

While Apple and Samsung both dealt with dropping shipments, other manufacturers fared better thanks to seasonal sales. Amazon shipped 4 million units, giving it a 6 percent market share, while Lenovo shipped 3.7 million units, marking its best-performing quarter ever, and giving it a 5.5 percent market share.

Overall, however, the fall in demand is impacting both high-end and cheaper tablets. In Q4 2014, 7-inch Android tablets made up half of all Android tablet shipments, but that is a significant drop from the share of 66 percent they took just three months earlier in Q1 2014.

Canalys analyst Rushabh Doshi attributes the decline to the increasing popularity of phablets, as well as price competition which has resulted in lower margins.

Canalys’ findings come a few days after another report from Strategy Analytics that also showed slowing growth in tablet shipments. The research firm found that total tablet shipments in Q4 2014 reached 78.3 million units, up just one percent year-over-year. Apple’s quarterly shipments decreased 18 percent year-over-year to 21.4 million as customers decided to purchase the iPhone 6 and 6 Plus instead of an iPad Mini.

Furthermore, Strategy Analytics senior analyst Eric Smith said that sales of Apple’s laptops and desktop computers may also be eating into the iPad Air 2’s growth.