4 reasons why tablet sales will explode

Hester Gras

Since the launch of the first iPad in April of 2010, the tablet market has really taken off. Apple alone has sold more than 100 million iPads in those past two and a half years. Counting Android and all other tablets as well as e-readers, 100 million units were sold in 2011. This number will reach 450 million by 2016, research from BI Intelligence indicates. The report identifies 4 important growth drivers for this explosion in tablet sales.

1. The average sale price of tablets is falling.

Through the first six months of 2012, tablet prices have seen a pretty steep drop off, despite the iPad’s continued dominance. The average sale price (ASP) of the iPad is down more than 11% from its 2011 price. The introduction of mini tablets, like the Kindle Fire and the iPad Mini, is disrupting the pricing dynamics of the market, This will drive a huge drop in ASP over the next few years.

2. Increased penetration in existing markets

Penetration will increase in markets where tablets already have a foothold. Increased adoption will be driven by falling prices and the tablet market’s subsumption of the e-reader market, which sold more than 20 million devices in 2011. The replacement rate of tablets is also somewhere between smartphones and PCs, indicating that sales can scale and grow rapidly.

3. Tablets are disruptive

Tablets are poor substitute for PCs if you are trying to run data intensive spreadsheets, but they vastly improve upon the media consumption experience. Tablet owners consume a huge amount of content, from news to magazines to movies to TV shows. And again, they are cheaper and getting even cheaper every day.

4. Multiple emerging markets are ripe for tablet disruption.

Tablets have only started making their way into the enterprise, a hardware market that will top $420 billion this year. Education is another great opportunity for tablets. U.S. primary and secondary schools spend about $5.5 billion on textbooks in 2010. College students spend hundreds of dollars per semester on textbooks they’ll only use once.

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