IDC: Apple beats Microsoft at its own game (the detachable tablet market)

First quarter seasonality combined with an overall disinterested customer base led to an annual decline of 14.7% in worldwide tablet shipments during the first quarter of 2016 (1Q16).  However, the research group says the iPad Pro has given Apple an “impressive lead” over Microsoft’s Surface in the detachable tablet market (IDC considers the iPad Pro a detachable due to the Smart Keyboard and similar peripherals).

Worldwide shipments of tablets (including slate and detachable form factors) reached 39.6 million, according to preliminary data from the International Data Corporation (IDC) Worldwide Quarterly Tablet Tracker. Slate tablets (lighter, slimmed down tablets without a dedicated physical keyboard) continued their decline while still accounting for 87.6% of all shipments. 

More importantly, the slate tablet segment has become synonymous with the low-end of the market, according to IDC. While this may bode well for vendors like Amazon that rely on hardware sales to increase their ecosystem size, it hasn’t helped vendors who rely solely on greater margins for hardware sales, notes the research group. 

Meanwhile, detachables experienced triple-digit year-over-year growth on shipments of more than 4.9 million units, an all-time high in the first quarter of a calendar year.

"Microsoft arguably created the market for detachable tablets with the launch of their Surface line of products," says Jitesh Ubrani, senior research analyst with IDC's Worldwide Quarterly Mobile Device Trackers. "With the PC industry in decline, the detachable market stands to benefit as consumers and enterprises seek to replace their aging PCs with detachables. 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.”

Likely due to eroding margins in regular slates, 1Q16 also saw the introduction of detachable tablets from traditional "mobile first" vendors like Samsung and Huawei. The mid-range pricing for these new devices will make them a difficult sell as consumers seeking performance will likely go for a Surface-like device, and the budget conscious seek wallet-friendly options from vendors like EFun, RCA, or others.

"The introduction of detachables from traditional smartphone vendors is only beginning and pose a real threat to traditional PC manufacturers," says Jean Philippe Bouchard, research Director, Tablets at IDC. "Their understanding of the mobile ecosystem and the volume achieved on their smartphone product lines will allow them to aggressively compete for this new computing segment. It is likely that those smartphone vendors will utilize the detachable segment to create new mobile computing end-user experiences if customers are using their detachables in combination with their smartphones.”

Apple's dominance in the overall tablet market is unsurprising, according to IDC. The research group thinks the iPad's future will be largely relegated to replacements – of older iPads or PCs—rather than net new additions. 

“The latest iPad Pro 9.7-inch and more enterprise friendly storage options for the slightly older iPad Pro 12.9-inch are healthy additions to the iPad lineup,” says Bouchard. “The recent price drop on the iPad Air 2 should help sway those who were previously undecided to upgrade their older iPad 2s.

Samsung's Galaxy Tab lineup continues to do well and is one of the last remaining "premium" Android tablets. The launch of the detachable TabPro S has been somewhat tepid due to the high price point, though this is likely a short-term hiccup as Samsung is typically quick to offer various products and different price points, says IDC.