Struggling tablet, 2-in-1 market: hope for Aussie?

In line with a worldwide decline in tablet and 2-in-1 devices, the Australian market took a 'massive hit' in the first quarter of 2015, according to IDC.

Despite the slump, the industry analyst says signs of life can still be found in the disappointing quarter.

Tablet and 2-in-1 shipments totalled 770,752 units in Australia, representing a 40% quarter over quarter decline, IDC says. "Whilst a seasonal slump in Q1 is customary, the magnitude of this decline is steeper than expected," it says.

The firm says shipment decline of 25% year over year further reinforced the reality of a slow-down in demand for this product category. IDC says that by analysing the segments of the market, some positivity remains.

Whilst consumer shipments declined by 27% year over year, commercial shipments increased by a modest 1.2% year over year, the analyst explains.

It says mobile workforce such as field-police and hospital doctors can experience significant productivity benefit from using mobile devices. The company cites Tasmania police's pilot of Acer Iconia (2-in-1) as a testimony to this claim, where a total of 37 devices managed to save the police force 280 hours and $2,600 over a period of six weeks.

Popularity of tablets and 2-in-1s is not restricted to the mobile workforce alone, however. Enterprise adoption of Microsoft Surface Pro 3 has gained traction in 2015Q1.

IDC says there is high growth potential for small businesses due to the recent Federal budget announcement. Asset tax write-off threshold increased from $1,000 to $20,000, which expands the wallet-size of the small business buyer.

Although purchase is not restricted to technology, increased affordability and utility of mobile devices may drive uptake, IDC explains.

"Opportunities that exist in the enterprise market are real and growing. The high-profile partnership between Apple and IBM is a strategic move to capture a slice of this pie," says Joseph Hsiao, market analyst at IDC Australia.

"Android for Work is Google's attempt to break into the enterprise market," he adds. "On top of that, there is the incumbent player Microsoft and their soon-to-be-released Windows 10. It will be interesting to see how the play unveils."

Apple and Samsung still dominate the Australian tablet market with a combined market share of over 75%. Local vendor Pendo is struggling to sustain what IDC says was an 'outstanding' performance from 2H14, as competition is fierce in the low-price range devices.