When it comes to tablet sales, Samsung Electronics Co. may be its own worst enemy.
The Suwon, South Korea-based company is busy gearing up for its next major product launch–a splashy event to introduce a new line of tablets, slated to take place in two weeks at New York’s historic Madison Square Garden.
But the fresh push into tablets comes just as evidence is growing that tablets are losing favor with consumers, undercut by the success of oversized smartphones known as phablets that companies including Samsung are offering.
On Thursday, research firm IDC lowered its outlook for global tablet shipments by 5.9%, citing sluggish demand so far this year and “additional market challenges” that it foresees for the rest of the year. The firm now expects tablet shipments to rise 12% this year, a far cry from 52% growth a year before.
In an interview this month with The Wall Street Journal, Samsung’s mobile chief J.K. Shin said the company had set an aggressive sales target for tablets this year, and is “working hard to achieve it.
But Samsung’s tablet ambitions may fall victim to its success with phablets, the oversized smartphones that have been a runaway success in South Korea, and Asia more broadly.
The popularity of phablets is one reason that tablet sales are relatively weak in Samsung’s home market, according to IDC.
Tablets’ popularity could take a further hit if rival Apple Inc.AAPL -0.37% pushes ahead with plans to release a phablet of its own this year, as the Journal reported in January.
Unlike smartphones, which often come with two-year carrier contracts and have a tendency to disappear in the back of taxi cabs, tablets generally stick around for several years, lengthening the so-called replacement cycle for the device.
Many users seem to be deciding that, with a 5.7-inch Galaxy Note 3 phablet in their pocket or purse, there may not be a burning need for a tablet.
According to IDC’s research, phablets have surged over the past year as a proportion of smartphone shipments, with 30.1 million units shipped in the first three months of 2014. Rising demand is “causing many people to second-guess tablet purchases,” IDC’s Tom Mainelli said in a statement.
(Via wsj.com )
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