Technology has come a long way since the iPad was introduced in 2010. Back then, the state-of-the-art iPhone still had a 3.5" screen and so-called "thin and light" notebooks were neither by today's standards. Notebooks also didn't have touch-screens, which probably seems downright prehistoric to today's youth!
With more and more people relying on their smartphones for accessing the internet, this made the market ripe for a lightweight device with a larger touch-screen that folks could use for reading, watching videos, and consuming everything else that the internet has to offer. Steve Jobs saw this opportunity and the resulting 9.7" iPad was a huge hit for Apple. This, in turn, spurred countless competitors to enter the market in the ensuing years.
Rapid Growth Followed by Rapid Decline
In fact, when gap intelligence started tracking this category in 2010, there were over 40 manufacturers with Tablets or less-robust "eReaders" in the channel. This number swelled to more than 140 in the following years and included brands from AARP to ZeePad selling products for as low as $49.
This naturally led to a huge shakeout in the past few years as evaporating profit margins pushed the weaker players out. The advent of 6" and 7" phone screens also forced the bigger players to quickly adapt. They came out with "hybrid" notebooks with flip screens (e.g., Lenovo's Yoga) or detachable keyboards (e.g., the Microsoft Surface).
So where does that leave Tablets? I've always found Walmart to be a great barometer for the "masses" while Costco provides similar insights into the smaller, yet lucrative, high-end shoppers. As of last week, Costco carried products from just 4 vendors with prices ranging from the $1,549 for the Microsoft Surface to $139 (after instant savings) for the Samsung 8" Galaxy Tab A.
The Walmart Barometer
Walmart still offers a plethora of brands at very low price points, but we're quickly seeing their numbers start to shrink. In fact, as shown in the below table, Walmart currently has 7 models on clearance, with little likelihood that they'll be replaced. These models represent roughly 20% of the retailer’s total tablet shelf (and 39% of non-Apple tablets available at Walmart).
Three of the tablets on clearance from Walmart are devices specifically marketed toward kids. Once the ClickN Kids, LeapFrog, and Nabi devices clear from Walmart, the Ematic FunTab ($59) will remain as the sole kids tablet available and the future of these "niche" devices is cloudy at best.
At this point, Walmart still carries a total of 33 tablets in-store. However, as shown in the below graph, a majority of these placements are represented by various size and memory configurations of the Apple iPad, which currently own 64% of Walmart’s total tablet shelf. Samsung and Nextbook still maintain a handful of placements, but all other vendors, including Ematic, Lenovo, RCA, Smartab, and one unbranded product, currently have a single tablet placement.
A Phoenix Shall Rise From the Ashes
Like dedicated GPS devices and Digital Picture Frames, I think it is safe to say that Tablets are another category whose best days are behind it. Fortunately, consumer demand and technology will make the next generation of products even more exciting as you'll see when you put on your smart glasses with voice recognition…
