The tablet market is growing even more quickly than some estimates had predicted, and the devices are being widely adopted by enterprises and driving billions in application revenue, according to several reports released this week. Low-cost smaller tablets in particular are influencing both device growth and applications revenue.
IDC has revised its estimates for the overall tablet market in 2013, saying that its projections have increased because the market is being driven by smaller, lower-cost devices. IDC now predicts that the worldwide tablet market in 2013 will be 190.9 million units, up from its previous forecast of 172.4 million.
Jitesh Ubrani, research analyst for IDC’s Tablet Tracker reports, said that half of the tablets shipped this quarter had a screen size of less than eight-inches.
“Vendors are moving quickly to compete in this space as consumers realize that these small devices are often more ideal than larger tablets for their daily consumption habits,” Ubrani added.
Android tablets are maintaining momentum in market share at the expense of Apple, IDC said. The company expects to see Android tablets hit a peak market share of 48.8% this year, while iOS tablets slip from 51% of the market last year to 46% this year. Windows-8-based tablets are expected to gradually take a larger market share, from 1% last year to a little more than 7% by 2017, according to IDC.
Meanwhile, a survery of 1,000 small businesses by AT&T found that tablets are widely used among small businesses, particularly young ones.
AT&T’s small business technology poll showed that larger small businesses – those with 51 to 99 employees – are even more likely to use tablets, with 90% of them using tablets compared to 69% of smaller businesses. Among businesses that are less than two years old, 80% used tablets, versus 69% among small businesses older than two years.
Smartphone use was also up among small businesses, at 85% – which was more than double the 42% that used smartphones five years ago, according to AT&T.
ABI reported this week that tablets will account for 35% of this year’s expected $25 billion in mobile apps revenue – $8.8 billion. While this is still only about half of the $16.4 billion that will be generated from smartphones this year, tablet app revenue is expected to match that of smartphones by 2017 and surpass them by 2018, according to ABI. The firm expects app revenue for both smartphones and tablets to reach $92 billion in five years.
Of the $25 billion dollar revnues expected for 2013, about 65% will come from devices running Apple’s iOS, 27% from Android devices, and another 8% from other mobile platforms.
ABI senior analyst Aapo Markkanen said the larger screens of tablets provide a more lucrative opportunity for apps by making them more appealing in look and feel.
“One might think that the larger installed base of smartphones would compensate for the disparity, but that notion fails to take into account the arrival of low-cost tablets, which hasn’t even started yet at its earnest. The smartphones paved the way for them, but in the end we believe that it’s the tablets that will prove the more transformative device segment of the two.”
Markkanen added that low-cost tablets open up new business opportunities by bringing wireless access and apps to children and the elderly, two demographics that have been traditionally left out of the wireless picture.
