It doesn't take a deep reading of supply-chain tea leaves to see that smaller tablets are taking over. Offering lower prices and better portability, tablets such as Apple's iPad mini, Amazon's Kindle Fire, and Google's Nexus 7 are loaded with consumer appeal.
Nonetheless, analytics firm NPD DisplaySearch has done the dirty work and confirmed our suspicions. In January, 9.7-inch touch-panel shipments dropped drastically, DisplaySearch's latest report claims, while the biggest gains came from 7-inch to 7.9-inch displays.
It's an interesting trend given that the full-size iPad was supposed to be a laptop killer. Apple's granddaddy tablet has certainly slain the netbook market, but if smaller tablets continue their healthy sales trajectory, it gets harder to imagine all those little screens standing in for a proper laptop.
So we must ask: Will people who buy the iPad mini and its small-fry brethren continue to purchase larger tablets as well? Or does the popularity of smaller tablets actually leave more room for the laptop--or perhaps the laptop-tablet hybrid--to thrive?
The rise of the handheld tablet
Let's back up for a moment and take a closer look at DisplaySearch's latest report, which the firm released Thursday. The researchers say that shipments of 9.7-inch touch panels--the kind that Apple's full-size iPad uses--dropped to 1.3 million units in January, down from 7.4 million units the month before. Although shipments of displays measuring 7 inches to 8 inches increased only modestly over the same period, from 12 million units to 14 million units, DisplaySearch still concludes that "the iPad mini has been more popular than the iPad."
Keep in mind, though, that DisplaySearch's estimates are based on supply-chain sources, and aren't official figures from Apple. As Matthew Panzarino pointed out recently, even Apple CEO Tim Cook warned against interpreting supply-chain estimates as gospel. "Our supply chain is very complex, and we have multiple sources for our components. Yields can vary ... supplier performance can vary," Cook said during an earnings call in January.
All that said, it seems like only a matter of time before small tablets do in fact take over. IHS, another market-analysis firm, predicted last October that small hardware will account for 33 percent of all tablets sold in 2013, up from 28 percent the year before. But IHS also called that a "conservative" estimate, noting that the percentage could grow even higher if Apple's suppliers could meet demand.
"There's no question that smaller sizes in tablets are going to become the main size category for tablets starting in 2013," Richard Shim, senior analyst for DisplaySearch's PC group, said in an interview. Like many other industry watchers, Shim believes that tablets will outsell laptops in the long run, with smaller, cheaper devices leading the charge.
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