Shipments of tablet PCs are expected to grow from 81.6 million units in 2011 to 424.9 million units by 2017, according to the latest NPD DisplaySearch Tablet Quarterly report. The forecast for 2013 shipments has increased from 168.9 million to 184.2 million, led by sales of Apple's iPad and Google Android-based tablets. The forecast estimates that in 2016 more tablet PCs will be shipped than notebook PCs.
A growing diversity of operating systems is driving the increase in demand for tablets, as well as rapidly evolving features, the report said. At the same time, the capacity of component manufacturing is being increased to meet new market demand.
The industry has already witnessed some diversification in the market with the early success of Amazon's Kindle Fire, with its "razor/razor blade model" of low-priced device predicated on content purchases. The DisplaySearch report also expects increased investments in the tablet supply chain--amid a lull in the growth of other device categories--to lead to more opportunities for new technologies to challenge incumbents. NPD expects an increase in investments to boost shipment growth in mature markets as retailers, brands and consumers experiment with emerging tablet opportunities.
"So far in this relatively young product category, the tablet PC market has been dominated by Apple and has tended to include a number of competing products that are similarly configured to the iPad," said NPD DisplaySearch senior analyst Richard Shim. "However, as the market matures and competitors become better attuned to consumer preferences and find opportunities to break new ground, we expect the landscape to change dramatically, giving consumers more choices, which will drive demand for more devices."
A key area where there is room for differentiation is operating systems. The report projects three operating systems will establish significant share in the market: Apple iOS, Google Android, and Microsoft Windows RT. The iOS operating system has been dominant in tablet PCs, but it is expected to lose share, from 72.1 percent in 2012 to 50.9 percent in 2017, as Android increases from 22.5 percent in 2012 to 40.5 percent over the same period. Meanwhile, share for Windows RT is also expected to grow, but from a very small base of 1.5 percent in 2012 to 7.5 percent in 2017.
In terms of component production, many display manufacturers are transitioning tablet panel production to larger plants, including Gen 6 and Gen 8, which will lead to greater capacity for tablet displays, as well as lower prices. In addition, the share of AMOLED displays in tablets is forecast to increase from 3 percent in 2012 to 30 percent by 2017, according to the report, which covers the changing landscape of screen sizes, features that are expected to be included and excluded in future tablets, and operating systems.