The year was 2001. Bill Gates had just announced the Microsoft Tablet PC. While a great idea at the time, the cost was too high—some models were priced at $2,000, meaning it was out of the price range of consumers and only appealed to a niche market. Advances in technology and Apple’s marketing campaigns made the iPad the tablet of choice when it was released in 2010 at a more reasonable price point of $500. Microsoft reacted to the iPad by releasing their own line of tablets, notably the Surface and Surface Pro, but it was too little, too late. While tablet sales are declining, Apple still holds a quarter of the tablet market. This leads to the question: is the standalone tablet dying?
My first encounter with a tablet would be with the iPad in late 2010. I personally noticed that a standalone tablet would still take getting used to by those who were not used to touchscreens, so we bought a keyboard accessory to go along with my mother’s iPad 2 back in 2011. Although she used it for a while, she got used to the touchscreen interface and promptly used the tablet by itself. When I was working in the Philippines in 2012 and 2013, I noticed that there were a lot of “convertible” tablets on the Asian market—called 2-in-1 tablets—that had the touchscreen of a tablet yet the hardware of a laptop, and even “phablets” (phones with screens the size of tablets) like the Samsung Galaxy Note series of smartphones.
A recent CNET article claimed that the tablet is dying and that 2-in-1s will be the future. In 2010, when standalone tablets were still the norm, analysts claimed that phablets wouldn’t get any traction. Jean Philippe Bouchard, a research director at International Data Corporation (IDC), commented on the 2010 Dell Streak, which is regarded as one of the first phablets. “At the time, everyone—me included—were all laughing about this product,” Bouchard said. “When you look now, the 5-inch is the norm for smartphones.” Dell stopped selling the Streak 13 months later.
Moor Insights & Strategy analyst Patrick Moorhead said that it wasn’t if—but when—the standalone tablet would die out. “I feel like this took about three years,” he said. “You now have very high quality 2-in-1s that are very thin, affordable—and people haven’t upgraded their notebook for a while,” he added, noticing the longevity of laptops. Phablets and convertible devices have started taking market share away from their standalone counterparts quickly. Most of these tablets are between seven and eight inches, while phone screens have approached (and in some cases, exceeded) five inches.
Bouchard said the size difference and a penchant for consumers to go towards larger screens would doom the standalone tablet “When your phone is only an inch or two shy, what’s the point?” Bouchard said. “In the past nine to twelve months, the impact of phablets on 7-inch tablets was just phenomenal,” he continued. The standalone tablet still dominates at the 10-inch mark, namely because you can’t easily put it in your pocket, but have trouble attracting consumers to buy newer models—and then there comes the number one issue for consumers: cost.
The Apple iPad Air 2 retails for $629 for 16 GB of storage, but boosting to 64 GB costs $100 more. But on other tablets, microSD cards can easily cover the storage difference for under $100. Moorhead also noted that there’s really no incentive to upgrade tablets once somebody already has one. “There aren’t enough black-and-white reasons to buy a new one, once you have a tablet,” he said. The tablet issue has even drawn the attention of Apple CEO Tim Cook. “You do see people hold on to their iPad longer than their iPhone. We don’t know what the upgrade cycle will be for people,” Cook said.
2-in-1s—or convertibles—appeal to both tablet and laptop users. It solves the problems of both—a tablet owner who wants the capabilities of a laptop device, and a laptop owner seeking to replace aging hardware. These users also tend to upgrade more often, which could incentivize companies to create their own 2-in-1 offerings. “The 2-in-1 consumer is buying at a faster rate than a traditional notebook buyer—8 to 12 months faster,” said Navin Shenoy, Intel’s corporate vice president and general manager of mobility platforms. Bouchard also noticed that benefits of having a 2-in-1 device. “In my opinion it’s a no-brainer to go with that 2-in-1,” he said.
Manufacturers aren’t convinced of the standalone tablet’s death knell just yet—reports are surfacing that Apple is planning to unveil a 13-inch tablet called the iPad Pro. Analysts such as Shenoy said that tablets can continue to thrive in other segments. One segment that it could thrive in is retail checkout stands. While some retailers have adopted tablets for checkout purposes, many still use traditional cash registers.
However, tablet makers might have to reconsider who they’re trying to sell their product to. “Everyone with a portfolio that includes laptops, tablets and PCs—they’re scratching their heads right now,” Bouchard said. Bouchard also brought up the cost issue and said it affects both the consumer and the business segments. “There is a limited budget for consumers and for enterprise. Companies will have to make bets.”