Thinking About iPad Pro, Surface, and the Tablet Market

Thinking About iPad Pro, Surface, and the Tablet Market

IDC today released a report describing first quarter tablet sales, noting that unit sales have shrunk overall year-over-year. Tablets were once expected to over-take the PC market, but it’s not clear now whether that will ever happen. So how do tablets evolve going forward?

Most of you are probably familiar with the various theories that try to explain this change. On the one hand, phablets have rendered mini-tablets—which were briefly a growth market—pointless for most. And on the other, detachable and 2-in-1 PCs, like Microsoft’s Surface, are cutting into sales of full-sized tablets because they are more versatile. And on the, um, third hand is an evolving understanding of the replacement cycle for this device type, which, over time, seems to resemble that of PCs much more than phones. That is, people replace tablets slowly, and keep existing devices longer.

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As it turns out, I think each of these theories is correct. But of course that doesn’t mean the tablet market disappears or even continues to shrink over time: Many, many people still derive great value from tablets—I certainly do—and use them for specific purposes. The tablet market may be smaller than the (also shrinking) PC market for the foreseeable future. And much smaller than the (now flat-lining) smart phone market. The question is what changes.

I think the tablet market can be split into two basic device types, consumption devices and productivity devices. On the consumption side, we have the non-Pro iPads–the Air, mini, and so on—and its many Android copiers. And on the productivity side, we have the detachable/2-in-1 tablets. Each can crossover into the other side—you could use a consumption tablet for some productivity work, and vice versa—but each is better suited for its own core usage.

On the consumption side, there’s not much to say: There’s pretty much iPad and then all those Android copiers, none of which are any good. I happen to prefer the iPad mini for reading and watching video content, but I could see others picking a larger iPad. Either way is fine, but I haven’t found any Android tablets worth a damn since the Nexus 7, which is discontinued.

The detachable side of the tablet market, however, is worth debate and discussion. And of course, it is here that Microsoft has a stake.

As IDC notes, Microsoft created—well, formalized—the market for detachables, and this past year we’ve seen any number of PCs that copy this design, not to mention the Apple iPad Pro(s) and Google’s Pixel C. In other words, detachables are a thing, and for now at least, it seems they’re here to stay.

“Microsoft arguably created the market for detachable tablets with the launch of their Surface line of products,” IDC senior research analyst Jitesh Ubrani said. “With the PC industry in decline, the detachable market stands to benefit as consumers and enterprises seek to replace their aging PCs with detachables.”

That’s good news, of a sort, since the shrinking size of the PC market can be offset in part by increased sales of what IDC (and I) consider tablets. But there’s some bad news in there too, if you’re a Microsoft fan: Microsoft isn’t winning in the market it created, as the iPad Pro–as shitty and pointless as it now is—actually outsold Surface in each of the past two quarters.

“Apple’s recent foray into this segment has garnered them an impressive lead in the short term, although continued long-term success may prove challenging as a higher entry price point staves off consumers and iOS has yet to prove its enterprise-readiness, leaving plenty of room for Microsoft and their hardware partners to reestablish themselves,” IDC notes.

(Not to get too far afield here, but I think the general trend towards mobile devices of all kinds is what’s hurting the PC industry the most. And we can tie the blame directly back to the iPhone, which of course changed everything. We’re still dealing with that today.)

With detachables pulling customers in from traditional tablet and PC markets, these things are obviously hybrid devices in every sense of the word. The problem for Microsoft, as I see it, is that the Surface and its PC-based copies are only great productivity machines. That is, they’re basically just mobile PCs, laptops. But an iPad Pro, in particular, is still a great (consumption) tablet too.

One might argue, correctly, that the iPad Pro is not exactly a full-featured productivity machine today. But the key word in that sentence is “today.” Apple will evolve the iPad Pro and improve things on the productivity side of things. But I don’t see how Microsoft or any PC maker can turn a Surface or other PC tablet into a great consumption tablet. The apps and ecosystems just aren’t there.

And that’s the bit that Microsoft needs to figure out. Surface can see a certain level of success … as a PC. But if Microsoft wants to expand this product beyond that niche usage, it will need to fix the entire Windows ecosystem, a daunting and perhaps impossible task. But all Apple needs to do is keep chipping away at iPad Pro, which already outsells Surface. Imagine how bad it will get when the functionality catches up.

Of course the nice thing about predictions is that they’re often wrong. Just ask IDC.

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