Behold the poor tablet computer.
Of all electronics devices, tablets have fared the worst in recent quarters. IDC on Friday said tablet shipments collapsed 30% year over year in 2Q, with most of the top vendors seeing double digit declines.
Analysts blamed low consumer confidence and purchasing power, a familiar refrain for the past year for tablets as well as PCs and smartphones. As a result, the focus by IDC, other analysts and chipmakers is on the end of 2023 and into 2024 when things should improve partly as excess chip inventory diminishes and demand improves.
IDC Research Manager Jitesh Ubrani said despite the strong decline in tablets, “it probably needs to happen consistently for a few more quarters before the category circles the drain.”
Tablets will grow in the low-cost segment especially in late ’23 or ’24, he added, due to an expected economic recovery. “That said, tablet growth will likely remain lower than PCs in the coming years as the category is awkwardly positioned between PCs and smartphones and we could potentially see long term decline in tablets as a result,” Ubrani said in an email to Fierce Electronics.
Apple is decidedly not in the low-cost tablet segment with its 11-in iPad Pro running Wi-Fi starting at $800. That compares to the low-end Xiaomi Redmi pad on Wi-Fi at $223. Apple has about 37% of the tablet market, putting it in the top spot, compared to fifth-place Xiaomi with one-tenth the market share. Overall, 28 million tablets shipped in 2Q, down from 40 million for the same period last year.
By comparison, laptops and desktops have also seen six straight quarters of contraction. In 2Q, the PC segment saw a 13% decline from the same period a year earlier.
RELATED: Apple survives decline as overall PC segment sees sixth quarter of contraction
While electronic devices are generally taking a beating with consumers and office workers, the bright spot in all electronics is AI accelerator chips, which can cost 10x to 20x more than those used in traditional servers. A big beneficiary is Nvidia with dominance in the GPU space amid some competition from AMD and Intel.
DigiTimes Research reported on Aug. 4 that global server shipments slipped 5.7% in 2Q over 1Q and predicted single digit growth in the third quarter. The big reason was cloud service providers are shifting their server budgets to higher-priced AI servers to meet the demands of popular generative AI, DigiTimes said.
Despite AI accelerator growth, chip sales were down 17% in 2Q, although revenues ticked up in June for the fourth month in a row, providing some confidence for a rebound by year’s end., according to the Semiconductor Industry Association.
RELATED: Chip sales edge up, but Q2 was 17% below a year ago
IDC said Monday that it is now forecasting worldwide server market revenue to be essentially flat this year due to inflation and compared to 20% growth in 2022 over 2021. “While flat for servers is better than the personal computing device market, it’s hardly the kind of growth anybody should be excited about,” said IDC spokesman Mike Shirer.