TrendForce’s Mobile PC Shipment Forecast for 2016 Shows Glimmer of Hope for Notebooks but Continuing Decline for Tablets

Annual shipments of notebooks are expected to decline significantly this year despite vendors’ best efforts during the year’s second half. This dismal result is attributed to the impact of weak shipments in the year’s first half and challenges in inventory reduction. According to global market research firm TrendForce, total notebook shipments for 2015 will reach around 164.4 million units, down 6.4% year on year.

“This year has been an extraordinary tough for the notebook market,” said TrendForce notebook analyst Anita Wang. “However shipments will recover in 2016, when more branded vendors will be entering the market, including Xiaomi and Huawei. Consumers have delayed buying notebooks due to the free upgrade of Windows 10 this year, but this slump in purchases will dissipate by next year; and new products released by new market entrants will spur the market. We estimate that total notebook shipments for 2016 will increase a little by 1% year on year to 165 million units.”

Demand for tablets, on the other hand, has become soft as these devices are still mainly limited to Internet browsing and entertainment in terms of functionality. With no novel features that can pique consumers’ interests, small tablets are increasingly being replaced by smartphones, which continue to grow in size. Hence, TrendForce has lowered its tablet shipment forecast for 2015 to 163.4 million units, representing a year-on-year decline of 14.9%. 

Tablet shipments will remain weak next year as large smartphones continue to affect tablet sales. “Business products such as Apple’s iPad Pro have high unit prices, so they will not be able to offset the decline in small tablet shipments even if they do become a market success,” Wang noted. “Our estimation indicates that a total of 153.4 million tablets will be shipped in 2016, down 6.1% year on year.”

The following is a summary of major trends that will be unfolding in the mobile PC (tablet and notebook) market next year:

Feeling pressure from large smartphones, tablet vendors will offer larger products to compete with notebooks

In the mobile PC market, the presence of large smartphones (5 inches and above in sizes) has grown considerably this year and eroded tablet sales. In particular, the share of 7-inch models in the global tablet market has contracted from 57% in 2014 to the estimated 50% this year. With large smartphones moving into their territory, tablet vendors in response have rolled out products of even larger sizes with the intention of expanding into the notebook market. TrendForce projects that tablets sized 10 inches and above will account for almost 30% of the global tablet market in 2016, a significant increase from the estimated 18% of this year.

Major tablet vendors that have released large tablets include Apple with its 12.9-inch iPad Pro, Samsung with its 18.4-inch Galaxy View and Microsoft with its 12.3-inch Surface Pro 4. In addition to having a larger display, iPad Pro and Surface Pro 4 also come with a detachable keyboard and a stylus as accessories. “The latest tablets from Microsoft and Apple clearly compete against notebooks, but they are limited to the business/professional market segment,” said Wang. “It will be difficult for large tablets to replace notebooks in the short term because the former are priced too high, whereas low-priced notebooks are plentiful.”

More notebooks will adopt FHD resolution technology and narrow bezel design will drive sales

By display resolution specs, HD (1366x768 pixels) notebook models account for over 80% of the global notebook market this year. By contrast, FHD (1920x1080 pixels) and above models represent only 18~19%. Prices of notebook panels have steadily declined this year. In particular, prices of mainstream HD notebook panels (sized 14 and 15.6 inches) have dropped almost to their cash costs. Consequently, panel suppliers now rely on FHD products to maintain their profits in this market. TrendForce forecasts that the share of FHD and above models in the global notebook market is expected to grow to 25~28% next year.

In addition to the resolution upgrade, notebook vendors will also make the bezel surrounding the display narrower as a way to raise the average sales prices of their products. A prominent example is Dell XPS 13, which was released earlier this year. The dimensions of this notebook’s exterior casing are previously for a model with 11.6-inch display. However, Dell’s narrow bezel design manages to squeeze a 13.3-inch display into the casing. Notebooks with larger screens but are still easy to carry are expected to be a driving factor in future notebook sales.