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Notebooks retake the crown from Tablets with rise in Q2 2014 sales

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Q2 2014 has been a weird quarter for PC and mobile phone sales. Samsung fell in smartphone and mobile phone sales and then this happened! Thanks to healthy growth in USA and Europe regions and a surprising negative growth of tablets meant that Notebook retook the lead from tablets. We are not sure if notebooks will keep the lead from tablets but  this is encouraging sign for PC device makers. Part of this is due to economic improvement in middle east, rise in Chromebook device sales and the availability of touch screen notebooks at affordable price point. 123.9 million PCs were shipped last quarter (with 14% YoY growth) with Apple leading the market (with 14% market share). Lenovo came in close second (just 780,000 units behind Apple) while HP and Dell came in third and fourth.

48.4 million units of tablets were shipped last quarter (5% down YoY) and apart from Apple and Samsung, there wasn’t much shipment from other brands. Shipments fell in Asia, EMEA while there was positive growth in USA and Africa.

‘A slowdown in the pace of innovation is creating an issue for tablet vendors. The tablet market has quickly found itself in the same position the notebook market was in some years ago, with minimal increases in hardware performance forming the basis for an argument to upgrade,’ said Canalys Senior Analyst Tim Coulling. ‘But when considering the most common tasks that tablets are asked to perform, the need for more horsepower is often not evident. Vendors will need to work harder to give reasons to upgrade if things are to improve in Q3. In addition, as smart phone screen sizes increase, the potential for such products to disrupt the market for 7″ tablets is also increasing.’

‘Pricing remains Apple’s biggest barrier to growth and essentially locks it out of a number of markets,’ said Canalys Research Analyst Rushabh Doshi. ‘By holding firm on its prices, Apple ensures that its tablet business is highly profitable. But as sales in its key markets slow, it is betting on the improving economic environment in high-growth markets, such as China, to drive future growth.’ Samsung faces a different challenge: it is fighting battles on all fronts as it attempts to compete in a wide range of market segments. ‘The release of the Galaxy Tab S line saw it add Super AMOLED screens to its tablet offerings as well as introduce a new 10.5″ screen to its portfolio. With Samsung playing in so many segments, it is able to find pockets of demand. But it also drives obsolescence in other areas of its portfolio, causing inventory buildup that necessitates rounds of promotional activity,’ said Doshi.

‘It is a little premature to expect a large-scale refresh, but pricing has now reached a point that is starting to stimulate demand,’ said Coulling. ‘Consumers can expect further price cuts in the second half of 2014 as Microsoft responds to the increasing threat from Google. It has dropped licensing costs on small form-factor tablets and announced “Windows with Bing”, which will provide Windows for free on low-cost notebooks. Falling prices are great for consumers but will do nothing to ease the pain for vendors, whose margins are under constant pressure.

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Amarendra

Co-Founder of GadgetDetail, gadget lover, addicted to American TV shows, fan of Ferrari and Federer, Bengalurian, FOOD LOVER, multiplex hater.

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