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Tablet sales result not set in stone

Entry-level tablets bring down sales value, but there is growth in the peripherals and new form factor categories, says Oscar Diamond

The total Great Britain IT market grew 2.7 per cent by value quarter on quarter.

This was not driven solely by tablets but a diverse range of segments, indicating that, despite the category's impressive performance of late, the UK IT market is not entirely tablet centred.

Tablets, however, grew in volume and value by 41.2 per cent and 7.8 per cent respectively in September, compared to a year ago.

Value growth has slowed down significantly, due to the lower average selling price (ASP), itself more representative of the type of tablets being sold than a fall in price - more 7in models are being sold, at the expense of 10-inchers.

Will this product group - which makes up a 20.2 per cent value share of the UK IT market - continue to see year-on-year value declines, especially as cheaper brands launch?

Other mobile computing segments continued to shrink, by 10.7 per cent and 5.2 per cent in volume and value respectively, compared to Q3 last year. The ASP of these other segments rose, however.

The higher ASP was driven by new form factors such as ultra-thins and hybrids - thin laptops with screens that rotate for tablet use. While traditional laptops decline, these form factors have seen big growth, with ultra-thins up 84.6 per cent and hybrids up 391.3 per cent in value when compared to Q3 last year.

However, although growth is high, ultra-thins make up only 16.3 per cent of this market and hybrids only 3.7 per cent.

Certain peripherals are benefiting from tablet growth. Keyboards have been up 4.1 per cent in volume and 21.8 per cent by value, with specially designed tablet keyboards up 99.4 per cent in terms of volume and 122.9 per cent in terms of value, giving them 22.9 per cent of the share by value in this market.

In contrast, sales of pointing devices such as mice were down 16.8 per cent and 10 per cent in volume and value respectively; mice offer no advantage over a touchscreen.

Monitors did well this quarter also, expanding 16.2 per cent by volume and 16.9 per cent in value year on year. This was caused by growth in the premium segment, where consumers appeared willing to spend more for higher resolution and wider viewing angles.

Another factor is the increasing popularity of multi-display setups, which is likely to be boosted again when the next generation of graphics cards is released.

The desktop computing market has been in solid decline for the past four quarters, but grew in volume and value by 1.6 per cent and 2.3 per cent respectively. The primary impetus was an increase in online sales.

All-in-ones (AiOs) - devices where the computer hardware is incorporated within the monitor - started to gain some serious traction towards the end of the quarter as well. While there will always be a market for desktops, other form factors offer much of the day-to-day utility, so this market is likely to remain stable.

Communication devices, such as wireless routers, repeaters and switches, experienced year-on-year growth in Q3 of 1.2 per cent by volume and 2.6 per cent in value. This represents a slight slowdown on figures enjoyed in previous quarters. Sales of home routers have been down consistently for two years, as there is little incentive for consumers to upgrade to newer wireless standards.

Instead, people are looking to upgrade their home networks to handle more wireless devices, for example, such as tablets and smartphones. On the B2B side, large-scale networking devices and laptop docks have driven growth, as businesses start to allow more people to work away from their desks.

Overall, the IT market can expect to see tablet sales continue to rise, but the category will not be able to drive value growth on its own. The market will instead have to find value growth in tablet peripherals, similar form factor computers such as hybrids or AiOs, and monitors.

Oscar Diamond is an account executive on the IT research panel at GfK