The Tablet Market Shrunk in Q4 2014

We all know that Apple sold fewer iPads in 2014 than they did in 2013. But it turns out that Apple wasn’t alone in experiencing a shortfall in 2014: the entire tablet market constricted in the final quarter of last year, with fewer tablets sold worldwide than the same quarter a year ago. This doesn’t mean that tablets are doomed, per se, but it does reset our expectations for how these devices will sell in the years ahead.

Here’s what happened.

In 2014, Apple sold 63.3 million iPads. That’s less than the 74.2 million it sold in 2013, but it’s also less than the 65.7 million it sold in 2012, a fact that has to date gone largely unnoticed.

And while this is a bit of a side-note, I will point out that Apple CEO Tim Cook—normally a gentlemen—curiously took the time to point out some critical commentary about the original 2010 iPad launch during the firm’s WWDC event. That commentary—”anyone who thinks the iPad is a game-changer is a tool”—drew laughs from the partisan home crowd. But it’s odd that Cook would point out such a thing in the midst of a sales slump. Apple sold over 10 million fewer iPads last year than it did in the year before, and the average selling price (ASP) of iPad continued to drop in 2014 as well.

As for the broader tablet market, Microsoft’s Panos Panay was correct when he pointed out at the mid-year 2014 Surface Pro 3 launch that the assumption that tablets would kill off the PC market wasn’t just premature, it was wrong. To that end, tablet sales overall in Q4 2014 fell by 12 percent to 67 million units. The PC market, meanwhile, was flat in the quarter. And not just flat, but healthier: PC makers sold 82.3 million PCs worldwide in Q4 2014. And they sold 312.2 million PCs worldwide in all of 2014, down just 1.13 percent from the 315.8 million sold in 2013.

OK, so that’s nice. Am I saying tablets are doomed now?

No. This isn’t a zero-sum game. And there is room in the market for PCs and tablets. In fact, I still expect tablet sales to overtake those of PCs. I just don’t expect the PC market to disappear as so many predicted when the iPad appeared.

And Mr. Cook did get one thing right about the iPad this past year: He noted that as a new market it wasn’t clear what the upgrade cycle would be like. And that what Apple was discovering—and I believe this to be true of the broader tablet market too—is that the iPad upgrade cycle was closer to that of PCs—every three to four years on average—than to phones, which are now upgraded every 1-2 years.

Too, after years of experimenting with ways to make iPads and other tablets more like PCs via productivity apps, bolt-on keyboards, and other silliness—most users have come to the obvious conclusion: A tablet is great for many things, but it’s not a PC replacement. And if you need real PC capabilities, nothing beats a real PC.

Conversely, it’s equally fair to say that PCs make terrible tablets, despite generations of Windows software advances and some truly stunning hardware. PCs are better PCs than tablets, and while some detachables like Surface Pro 3 get as close as possible to that “one device that does it all,” no one device does it all. Part of it is physical, but part of it is also virtual: The Windows tablet ecosystem still sucks.

And that, folks, is why I travel with, and use, three different devices: A PC on which to get work done, a mini-tablet with which to consume content (movies and other videos, e-books, games) and a smart phone. Yes, some can use two devices—a phablet instead of a phone and a tablet, perhaps—but I find it more efficient to use the right tool for the job. And let’s face it, an Ultrabook and a mini-tablet don’t exactly weigh down a travel bag, and using one means I preserve the battery life in the other.

Put simply, the game hasn’t changed. We just have more choices. And in such a world, everyone wins.