Tablets To Continue Winning Run In 2014 And Account For 50% Of All PCs Shipped: Report

Tablets are expected to outship all other PC form factors combined in 2014, accounting for nearly 50 percent of the worldwide PC market, which includes desktops and notebooks, according to a new report that also foresees tough times ahead for both Apple (NASDAQ:AAPL) and Samsung (KRX:005935) as competition intensifies in the global tablet market.

According to the report from Canalys, a research firm, the worldwide PC market grew 18 percent in the third quarter of 2013 and growth was attributed mainly to tablet shipments. which accounted for 40 percent of all PC shipments during the period even as shipments of desktops and notebooks continued to decline. The report projected that tablet shipments in 2014 will touch 285 million units and grow to hit 396 million units by 2017.

“Apple’s decline in PC market share is unavoidable when considering its business model. Samsung narrowly took the lead in EMEA this quarter and Apple will lose its position to competitors in more markets in the future,” Tim Coulling, a senior analyst at Canalys, said in a statement.

Apple and Samsung, the two biggest players in the current tablet market will see newcomers mount a stiff challenge to their dominance, the report noted, adding that although Apple’s desktop and notebook business have remained stable so far, the company’s prioritization of protecting gross margins would see its PC market share continue to decline.

According to the report, Microsoft (NASDAQ:MSFT) is likely to take a 5 percent bite of the tablet PC market in 2014 when the software giant is expected to experience another major shift as the Nokia acquisition brings it a step closer to becoming a full-fledged smart-device vendor.

“To improve its position it must drive app development and better utilize other relevant parts of its business to round out its mobile device ecosystem,” Pin Chen Tang, a research analyst at Canalys, said. “A critical first step is to address the coexistence of Windows Phone and Windows RT. Having three different operating systems to address the smart device landscape is confusing to both developers and consumers alike.”

Meanwhile, Google’s Android operating system will be responsible for driving growth in the market, and it is forecast to grab a 65 percent share in 2014 with 185 million units. Although Samsung dominated the Android tablet shipments in the third quarter of this year, the company may lose market share in the near future as competitors make significant progress, according to the report.

“Vendors such as Acer, Asus, HP, and Lenovo have all entered the price war, with entry-level products at sub-U$150 price points,” James Wang, a Shanghai-based analyst, said in the statement. “With vastly different cost structures these vendors will continue to find it extremely challenging to keep pace with local competitors, especially in APAC and Latin America.”