Monday, August 4, 2014

Whither the tablet?

Ars Technica had an interesting op-ed today. They look at the stagnating sales of tablets and conclude they are already much like PCs: fast enough and good enough that they only get replaced when broken. They've got to the point where the only differentiator from previous models is the price, and where people see little need to upgrade their hardware.

I'm not surprised; my Tablet Z feels as fresh and as fast as it did when I bought it over a year ago. Android and IOS are both mature so new OS updates don't feel that urgent any longer. Mobile apps are written with slower phones in mind, so there's nothing out there that even begins to tax the CPU or graphics. I doubt I'll get a new tablet until this one breaks. My wife’s iPad Mini will also likely be in use for years to come.

This spells trouble for makers that counted on tablets to replace their stalled computer sales. I'd go out on a limb and say this is especially troublesome for a company like Microsoft; they generated a lot of ill-will trying to push their customers onto the tablet/hybrid train, only to find out there was never any market growth to be had. And as Windows Phone is not exactly taking the world by storm they have few other growth segments left.

But even having a thriving phone business may only help for so long. My guess is that in another couple of years phones will be in much the same situation as tablets today. The OS and software ecosystems are pretty mature, and we've already reached the point where more speed or RAM just doesn't add meaningfully to the experience. Makers are piling on more or less useless gimmicks (curved screens! face tracking! 3D!) to entice people to buy. Some recently popular features such as water resistance, rugged design and materials, and remote disabling and locating will actually reduce the need to replace broken or lost phones over time.

So what will replace these devices as consumer growth markets? Perhaps, in the short term, nothing. These almost magical things have replaced piles of special-purpose devices. They let us do so much more with so much less. And they keep getting cheaper, better and longer lasting. Just like the agricultural revolution let us spend much less on food than we ever used to, we consumers can now spend much less money on gadgets overall, and I suspect that's where we're heading.

In the long run we could see real robotics become new must-have devices for instance, but viable, useful "home robots" are still many years away (it's a problem of hardware cost and complexity as much as software). "Internet of Things" has some serious privacy implications and still doesn't have compelling reasons why you would want any of it. Until people come up with completely new market categories (no, "wearables" is not it), life as a consumer electronics company is going to be rough.


  1. Curious though--my phone does feel pretty slow after 2 years, so maybe they are in the same upgrade cycle. My gen1 Nexus 7 is dreadfully slow now, almost unusable. I'm waiting for the next iPad Air and that will be my tablet.

    That being said I also use tech until it's unusable. My laptop is a first generation Unibody Macbook (even before Apple put the 'Pro' moniker on it). Still running like a champ--at least when it's plugged in.

  2. The Nexus 7 specifically has some issues that make it slower over time. Google for it and you'll find a few things you can do to freshen it up again.

    My previous phone (a Galaxy Nexus) was already falling behind the curve after a year. The camera, screen and other aspects just weren't up to par any longer. And a few things would start to tax the never very high-end processor. With my current phone there is no sign of this at all. Unless I have an accident with it, I expect it will last for three years, perhaps longer.

  3. The only reason why smartphones are still in a very active cycle is the crazy subvention system by carriers. Without that, not so many people would change phone every 12-24 months...

    The growth area for makers in the short-mid term might be the wearable devices. Those are pretty simple technically (especially compared with phones or tablets) but are still sold at a relatively high price. Software investment behind is much easier to amortize than hardware facilities.
    And even better: it is still a pretty greenfield area!!

  4. I like the idea of wearables and I think they have a good shot at becoming a sizeable, stable market once the early issues are sorted out. But no, they will not be a growth area for most makers and not for more than a brief spurt. I strongly suspect you'll buy wearables the same way you buy a watch or a pedometer today: you choose one, then just keep using it until it breaks or is hopelessly obsolete. Both of which probably takes a lot longer than for either tablets or for phones; they do a lot less to begin with and the major makers have already settled on APIs to make sure your thingy will work with your future phones.

    The PC was unique. You had an actual rapid-growth market for nearly twenty years. When we switched to flat-screen TVs that, too, was a growth market for a decade. Same thing with the switch to the CD and the DVD. Digital cameras exploded in the past fifteen years. The smart phone growth has been phenomenal, and the tablet growth was too, for a couple of years. But now, with the exception for the phone, all of these have petered out. Growth markets no more, they are mostly doing replacement business or actually shrinking.

    Wearables or IoT just doesn't seem to have the disruptive power to create entire new growth markets for a decade or longer. And I suspect the doing-it-all phone is making it impossile for any device that is mostly software to ever do the same again. As I stated, robotics may be the next thing since that's not something the phone can usurp, but we're likely a decade or longer away from that still.

    As you say, the phone growth has been extended by subsidized pricing of course. But growth is slowing, and legislation are putting a damper on this in various ways across the world. I give the phone another 2-3 years before it, too, stalls out into a slow replacement market in the West.