NPD: Tablets, Smartphones Bright Spots For Q4

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Tablets and smartphones will be the bright spots in an “otherwise dismal holiday outlook,” said The NPD Group’s industry analysis VP Stephen Baker in a webinar organized by TWICE.

In the second quarter, he noted, tablets/e-readers and smartphones accounted for more than 15 percent of consumer-level CE industry dollar sales.

Smartphones, propelled by big new-product launches that spur smartphone interest, will be the “core CE category this holiday,” he said. And iPads will be the “must-have” product for the second consecutive holiday season.

“High unit volumes and repeat buyers make phones the most reliable traffic-creating category for retail in Q4,” he said. And in other good news for retailers, Baker said he has found “no evidence of any price pressure” in the smartphone market. In the second quarter, he pointed out, smartphones priced at $150 and more accounted for 25 percent of smartphone unit sellthrough, up from the year-ago 20 percent and consistent with the 24 percent to 26 percent share ranges in the quarters in between.

Smartphones continue to increase their unit-sales share, he added, rising to 58 percent of all cellphones purchased by consumers in the second quarter, up from 42 percent in the year-ago quarter.

Although retailers are enjoying smartphone growth, carriers still account for a majority of smartphone sales to consumers, NPD found. Carriers’ smartphone share hit 72 percent in the second quarter compared to 70 percent in the previous quarter, 66 percent in the fourth quarter of 2010, 64 percent in the third quarter of 2010, and 71 percent in the second quarter of 2010, NPD found.

In the tablet market, the iPad “is the most important holiday SKU,” Baker said. The iPad will “remain the dominant device in the category” and is “unlikely to see significant competition from tier 1 OEM,” he continued.

New tablet entrants in the fourth quarter “will be price-driven despite the launch of some gen-2 Android devices.” First-generation Android tablets “will be used as traffic drivers for both Black Friday and [the] holiday in general.”

Although sales of non-iPad tablet are rising, Apple’s sales lead is more than 4-to-1, Baker said. For the April 2010 through August 2011 period, he noted, consumers bought almost 19 million iPads and only 4.5 million other-brand tablets.

Excluding Hewlett-Packard, unit-share leaders in the non-iPad tablet segment during the October 2010 through August 2011 period were, in order, Samsung, Motorola, Acer, Asus, Archos, Coby, Viewsonic and RIM, NPD found.

Although the iPad is the market leader, Apple- direct sales accounted for 56 percent of iPads sold during the October 2010 through June 2011 period, leaving other retailers with a lot less sales opportunity that they otherwise could have had, NPD found. During the period, Best Buy accounted for 23 percent of sales, with carriers accounting for 5 percent, Target with 4 percent, and all others accounting for 11 percent.

The large installed bases of tablets and smartphones and their high sales velocities make them ideal segments for accessory sales at the time of initial sale or later, Baker noted.


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