While Microsoft has given up on the phone market, they still appear to have a fighting chance in the tablet market, according to Australian analyst company Telsyte.

From their analysis of sell-through of tablets to consumers, they found easing demand for Android tablets in the first half of 2017, and predict Windows tablets such as the Surface Pro will overtake Android tablets by the end of 2017.

The overall Australian tablet market has cooled during the first half of 2017 with 1.4 million units sold, down 10 percent from a year ago. Android tablet sales declined by 29 percent compared to the first half of 2016, with many manufacturers holding back the release of new Android tablets, including Google which has not released a new Nexus or Pixel tablet in over 12 months. Telsyte also found waning Android support from manufacturers who have given greater focus to Microsoft Windows 10-based touchscreen devices.

Apple, Samsung, Microsoft and Lenovo remain the top four tablet manufacturers (by sales) in 1H 2017, and accounted for over 80 percent of total units sold. Almost half of all tablets sold in Australia remain Apple iPads however.

Telsyte’s latest research shows 2-in-1 tablets, or tablets which can be also used as a computing device (with keyboard), continued to go from strength to strength with 2-in-1s accounting for a third of tablet sales in 1H 2017. Windows-based devices from a range of manufacturers appear to have benefited from the merging of PC and tablet features, while demand for the iPad Pro has also been increasing as Apple positions its top-of-range products as an all-in-one computing device for the average computer or tablet user.

“Microsoft seems to be redeeming itself with larger touchscreens despite losing the smartphone platform battle,” Telsyte Managing Director, Foad Fadaghi, says.

Telsyte research shows more Australian consumers are opting for 4G/LTE capable tablets. The Trend will likely continue with the availability of shared data plans, larger mobile data caps and the anticipated arrival of eSIMs on tablets in the near future.

Telsyte estimates tablet sales will pick up with around 1.7 million to be sold in the second half of 2017, an increase of 7 percent over the same period last year. A return to growth is expected to be driven by consumers replacing ageing, unsupported devices or by upgrading to 2-in-1s.

Some bad news for Microsoft is that Telsyte expects the release of Apple’s ARKit and Google’s ARCore will not only encourage smartphone upgrades but also start to have positive flow-on effects to tablet sales.

Telsyte believes some AR applications will benefit from a larger display for better viewing and content sharing experiences between families and friends. Consumers identified games and entertainment as the main AR apps they are interested in using on tablets.

According to Telsyte’s research, over 40 percent of Australian tablet users have already tried AR applications such as Pokémon Go, Layar and AR like features found in social media photo filters. While most Australians intend to use AR mainly on their smartphones, Telsyte research shows more Australian consumers would rather use AR on tablets than on standalone AR headsets or smart glasses.

Telsyte estimates less than 10 percent of the current iPad user base is capable of running AR apps developed using Apple’s ARKit. Google has provided limited guidance on minimum requirements for running ARCore on Android tablets; however, it is expected that low-end Android tablets will not provide an adequate AR experience, which depends on powerful CPUs and graphics processing chips.

So far few mixed reality applications have been announced for Windows tablets, with the platform unable to benefit from the cross-over between phone and tablet platforms.

“While AR has been around for a long time, new developer platforms and better hardware will encourage business investment in the next generation of tablet apps,” Telsyte Senior Analyst, Alvin Lee, says.

Telsyte counts tablets as slate devices with 7 inches or larger screens and excludes convertible laptops such as the Lenovo Yoga 910.

Source: Telesyte