Best Buy CEO: “The tablets boomed and now are crashing”

Back in 2010, Apple launched iPad tablet following which number of companies including Microsoft released various tablets in the market. Everyone expected tablet sales to exceed PC sales in 2014, but it never happened. Tablet sales growth is now at a decent 45% YoY which is not a bad thing, but for a new product which is gaining adoption around the world, this growth story is not encouraging. The main reason for lack of explosive growth is the purpose to upgrade old tablets and their too restrictive use cases. If you own a tablet, you can use it for browsing, watching videos, playing games and few other things. When you are on the go, you prefer your smartphone to be with you. When you want to get some real work done, you will use your laptop. In such scenarios, a 2 year old tablet can still serve the same purpose of light web browsing, watching videos, etc, with ease.

BestBuy CEO recently spoke with Recode on tablet sales, here is the response from him,

You said the tablet had “crashed.” Do you believe it’s going away?

Yeah, “crashed” is a strong word. So, the tablets have been an unbelievable phenomenon. I don’t think there’s a category that ever took off so quickly and so big in the history of tech.

The issue has then been that, once you have a tablet of a certain generation, it’s not clear that you have to move on to the next generation.

As a consumer?

As a consumer. I think replacement is the issue. The penetration has gone so fast that it’s reaching an amazing degree and therefore it becomes more of a replacement market, and the level of innovation in the past year has not been as great as it had been in the previous two years. So, there again, the jury’s out in terms of what’s going to happen, because it’s going to depend on what innovation comes to market. But you need a reason to replace.

He also revealed that BestBuy actually had a revival of the PC business this quarter, part of it was that Microsoft stopped supporting Windows XP and users are upgrading them to latest devices. He also revealed the 2-in-1 devices like Surface Pro 3 should see success in the market.

The tablets boomed and now are crashing. The volume has really gone down in the last several months. But I think the laptop has something of a revival because it’s becoming more versatile. So, with the two-in-ones, you have the opportunity to have both a tablet and laptop, and that’s appealing to students in particular. So you have an evolution. The boundaries are not as well defined as they used to be.

If you take the [Microsoft] Surface, is it a tablet or a laptop? I think it’s both. So I don’t think the laptop has said its last word.

Read the full interview at Recode.

Source: Recode

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