Double blow for stuttering tablet market

Retailer Dixons and analyst Context in agreement that tablet market now shrinking

It's been a bleak morning for tablets as the boss of the UK's largest electronics retailer and an analyst house simultaneously flagged up falling sales of the form factor.

No sooner had Dixons Carphone chief executive Sebastian James revealed this morning that the retailer's tablet sales are down year on year, analyst Context released data showing that sales of the touchy-feely devices across the wider European channel are plunging south.

According to Context tablet sales through leading distributors in the region fell 9.3 per cent in Q3 and 6.5 per cent in the first two months of Q4.

This brings growth for the whole year to November down to a muted 1.8 per cent.

Context put the reversal in the tablet's fortune down to rising saturation in more mature markets and longer-than-expected product lifecycles.

In his interim results commentary this morning, James attributed the market contraction to "limited product innovation" in the market.

However, tablet's loss has been notebook's gain as sales, with consumer clamshell laptops shipments up by 16.6 per cent in October and November on the back of the tablet slowdown, Context said.

Overall PC unit sales across Western European distribution grew 15.6 per cent between January and November on an annual comparison, Context said, with growth peaking at 21.7 per cent in Q3 before dropping back slightly to 16.9 per cent in October and November.

Growth in the first half of 2014 was driven by XP migrations in the business desktop sector, Context said, with business-focused PC sales growing 29.8 per cent in Q2.

However, by Q4, business PC growth had slowed to single digits as the XP migration effect lessoned. Consumer PC sales then took up the slack as the XP effect kicked in at a mass-market level and the market was flooded with budget laptops in the wake of Microsoft's Windows-with-Bing announcement.