iPad sales hit by rise of cheap tablets

The iPad's market share continues to slip as cheap tablets flood the global tablet market, according to a new report from Deloitte.

iPad sales growth slowed between the first and last quarters of 2013, according to Deloitte's TMT Predictions 2014 report. The drop returned iPad sale growth to levels almost the same as a year earlier.

"In last year iPad sales growth has slowed," said Stuart Johnston, national TMT leader at Deloitte. "It's not so much a case of is losing its popularity, it's the stratification that's occurring."

Top tier tablet brands, particularly the iPad, are facing a rise in sales of cheaper devices, said Johnston. By the end of the first quarter for 2014, Deloitte predicts the installed base of compact tablets with screens 8.5 inches or smaller will eclipse "classic" or larger tablets like the iPad.

"We're seeing dramatic price ranges," Johnston said. "But the key is what they are being used for. Generally they have lower processor speed, lower battery life and lower resolution compared to top end products."

While Deloitte research suggests iPad ownership has fallen from 70% in the UK in 2012 to 52% in 2013, it could not provide figures for the Australian market.

This follows predictions by analyst firm Teslyte last year that iPad will lose its status as the top tablet seller in Australia by 2015. It predicted Android sales will overtake Apple sales, while Microsoft tablets would reach 20 percent of sales by 2017.

While the Deloitte report acknowledged the limitations of low end tablets, it also predicted that falling prices and better capabilities mean tablets in general are more likely to be used for work purposes.

"For some [enterprise CIOs] the right answer may be to block access by any device not provisioned by the IT department," the report states. "For others companies, installing strong authentication solutions and partitioning tablets to have separate professional and personal areas is the solution."

The report also predicted the price of "ruggedised" devices for field workers will reach US$250 this year. "Companies with field force department should also constantly review the growing range of tablets launching on the market, to assess whether a combination of a consumer-oriented device, with a robust case, costing a few tens of dollar, may be sufficiently resilient..."

Meanwhile, Deloitte's analysts said the smartphone buying cycle is slowing. "What we're seeing is smartphones reaching saturation," said Deloitte Australia's TMT leader Stuart Johnston. "Whilst we're not saying smartphones are going to stop selling, the rapid exponential growth curve we've seen the last 3 or 4 years will start to slow."

Sales of smartphones with 5 to 6.9 inch screens, sometimes called "phablets", are predicted to account for 25 percent of global smartphone sales this year.

Sales of these large phones are predicted to double volume this year compared with 2013, reaching 300 million globally, according to the Deloitte TMT Predictions report released this week.