NPD: Tablet shipments declined year-over-year for the first time in Q1 2014, annual growth still expected

We’ve seen many sources indicate that tablet shipment growth is slowing, with the latest report suggesting it could be on its way into the negative. Now it has finally happened: tablet PC shipments declined year-over-year for the first time in Q1 2014.

The news comes from a quarterly report by NPD, which explains many brands saw weak tablet shipments in the first three months of the year “due in part to delayed launches of new products.” While the firm has lowered its forecast for tablet shipments in 2014 (from 315 million to 285 million), it is still projecting an overall growth for the year:

You will notice, however, that the jump between 2013 and 2014 is minute compared to the one between 2012 and 2013. In fact, NPD expects the growth rate to fall to 14 percent this year, and slow to single digits by 2017.

The reduction in demand should be blamed on the increase in competition between large smartphones (5.5-inch and up) and small tablet PCs (7-inch to 7.9-inch). NPD expects major brands to move to larger sizes, which will in turn help increase tablet revenues. The firm projects shipments of 8-inch to 10.9-inch tablets will overtake 7-inch to 7.9-inch tablets by 2018:

“Tablet PC demand in 2014 is being affected by falling demand for the 7” class in emerging regions and in China, where many local white-box brands have experienced lower-than-expected shipment growth,” Hisakazu Torii, vice president of smart application research at NPD DisplaySearch, said in a statement. “Most major brands have recently reduced their business plans for 2014. There is a risk that the replacement cycle for tablet PCs will lengthen beyond the one to two year range unless brands can develop more attractive usage scenarios.”

While we are seeing the first quarterly dip, tablets still have a bright future for the next few years. Until we see an annual decline, the tech giants will continue to fight a very vicious war for the customers of these devices.

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