RCA gives unexpected boost to tablet market in Q3

RCA unexpectedly jolted an otherwise slowing tablet market in the third quarter as Apple’s iPad shipments continued to decline.

Global tablet shipments totaled 53.8 million units during the third quarter, growing by 11.5 percent compared to the same quarter the previous year, according to research released Thursday by IDC.

The surprise of the report, though, was that RCA shipped 2.6 million tablets worldwide, up 194 percent year-over-year, vaulting the company into fifth place among global tablet vendors. The venerable brand was established in 1919 as the Radio Corporation of America and had never before cracked the list of top vendors.

A one-time deal between RCA and Wal-Mart to sell low-cost Android tablets with screen sizes between 7 and 10 inches “skewered” previous forecasts, sending shipment growth higher than forecasted, said Jean Philippe Bouchard, IDC research director for tablets.

RCA tablets are expected to sell in volume until the end of November, which is considered one of the biggest shopping periods in the U.S., Bouchard said.

Buyers are still showing a preference for low-cost tablets, most of which run Android. But low-cost tablets are not a sustainable market for companies that need to sell higher-margin products, so it remains to be seen how long RCA will maintain its position, Bouchard said.

Tablet shipments were lower-than-expected in previous quarters and analysts have been downgrading 2014 forecasts as users are increasingly buying smartphones and laptops such as Chromebooks rather than tablets.

But tablet shipments received a boost from strong demand in the U.S. and back-to-school promotions during the third quarter, Bouchard said.

However, Apple didn’t benefit from the growth in tablet shipments. It remained the world’s top tablet maker with a 22.8 percent market share, but its unit shipments declined by 12.8 percent to 12.3 million units. In second place was Samsung, which had an 18.3 percent market share and unit shipments totaling 9.9 million, growing by 5.6 percent. Asus and Lenovo, which deal in Windows and Android tablets, remained in the third and fourth spots, respectively.

Apple’s tablet shipments dropped just ahead of the introduction of new iPad models, which started shipping last week, and will be counted in the fourth-quarter shipment figures. The new iPads, including Air 2 and Mini 3, are considered incremental upgrades, but could inject some life into the slumping (by Apple standards) brand. IBM is also expected to resell Apple’s mobile devices as part of an enterprise tie-up, which could also boost iPad shipments in the coming quarters.

Shipments for Samsung, which largely deals in Android tablets, grew because of an increased focus on North America and the Middle East and Africa. The company adjusts to market trends quickly, which sustains its continued growth, Bouchard said.

To comment on this article and other CIO content, visit us on Facebook, LinkedIn or Twitter.
Download the CIO October 2016 Digital Magazine
Notice to our Readers
We're now using social media to take your comments and feedback. Learn more about this here.