Tablet Numbers Are Bad For Apple But Worse For Samsung

SAN FRANCISCO — The tablet computer market isn't what it used to be, and it ain't for growth investors.

Fourth-quarter and year-end tablet shipment figures from market researcher IDC show that growth has nearly evaporated for the iPad, the iPad Mini, and competing devices from Samsung and others.

Shipments from all tablet makers rose just 4.4% for the full year and suffered their first-ever year-over-year decline in the fourth quarter, slipping just over 3%, the report said.

By contrast, shipments in the fourth-quarter of 2013 had surged 28% year-over-year.

One reason the market has stalled is consumer preference for larger smartphones like the Samsung Galaxy S5 and the iPhone 6. Those newer devices give users a screen almost as big as a tablet, plus one-hand control and the ability to make a call.

The IDC numbers also make clear that leading tablet makers failed to produce enough innovation last year to excite consumers and drive sales higher.

All of the top five tablet makers except China-based Lenovo saw a year-over-year decline during the fourth quarter, which includes the crucial holiday shopping season.

Even though fourth-quarter shipments of iPads fell almost 18% from a year earlier, Apple fared better than rivals Samsung and Amazon.

Unit shipments dropped 18.4% for the Korean giant and a staggering 70% for Seattle-based Amazon.

In another sign of tablet-market weakness, the "other" category gained the largest share in 2014, with shipments among a raft of smaller device makers surging 31%, year-over-year.

Those smaller players, in aggregate, captured 44% of the total market last year.

A consumer electronics market that's growing less than 5% a year AND splintering doesn't look like a healthy one.

The stall in tablet shipment growth is remarkable considering that the market grew 50% in 2013.

It's worth noting for any tech growth investors who've bet not only on makers of the devices themselves but on the makers of chips, screens and other components inside them.

APPLE: LESS VULNERABLE

If these numbers had come out a year ago, when iPads represented 20% of Apple's revenue, they might be cause for more alarm for the Cupertino, Calif.-based hardware giant.

But in its most recent quarter, iPad sales had slipped to just 12% of the company's total, while smartphone sales comprised almost 69%.

Overall Apple sales, meanwhile, rose 30%, powered by sales of its newest phones in China, which surged 70%.

But for Samsung, overall sales for the three months and nine months ended in September fell from a year earlier.

And remember, that doesn't include the results of its steep fourth-quarter fall in the tablet market.

Even though Apple lost more points of tablet market share during all of 2014, the market's recent stall looks to be a bigger problem for Samsung than for Apple.