Wednesday, January 16, 2013

Tablets to Outsell Notebooks in 2013

Tablets to Outsell Notebooks in 2013
Online advertising now 25% of U.S. ad budgets; mobile key to growth

Two important milestones were reached for B2B marketers this week. First, tablets are expected to outship notebooks this year, according to separate report this week from NPD DisplaySearch and Gartner. Second, U.S. marketers will devote at least 25 percent of their budgets to online advertising in 2013.

For the first time ever, researchers predict that tablets will grab more than 50 percent of market share in 2013, up from around 38 percent last year and 26 percent in 2011. Growth in tablet shipments are predicted to rise 64 percent this year from 2012, the report said. Global demand for tablets has opened up the market for a variety of players, both large and small. But, what caught our attention was that growth will not necessarily be driven by the iPad, but by a variety of devices, particularly those with smaller screens. Apple recently curtailed order for iPad parts, although we think the company’s recent stock slide is a correction more than a long-term trend and might signal a buying opportunity for those looking for bargains in the tech sector.

“Tablets have dramatically changed the device landscape for PCs, not so much by cannibalizing PC sales, but by causing PC users to shift consumption to tablets rather than replacing older PCs,” according to Gartner analyst Mikako Kitagawa, in the report. “This transformation was triggered by the availability of low-cost tablets in 2012,” he added.

According to the NPD folks, tablets with screen size between 7.0 and 7.9 inches will garner 45 percent of the market this year--that’s about 108 million units. In contrast, larger 9.7-inch tablets such as the traditional iPad are estimate to get only a 17 percent share of market. The other 38 percent is made up of the wide variety of sizes, ranging from 5.6 inches to 13.3 inches.

"The tablet PC market saw increasing investments in North America in the second half of 2012, from major brands that tested not only new screen sizes and price points, but also unconventional business models to support their efforts," NPD DisplaySearch analyst Richard Shim said in a news release. "In 2013, further investments are expected worldwide, stoking demand to the point that tablet PC shipments will exceed those of notebook PCs."

Online poised for 25 percent share of ad dollars; mobile fueling half the growth

Meanwhile, online advertising will pass a symbolic milestone this year, becoming one out of every four dollars spent by U.S. advertisers, according to new projections from the equity research team at J.P. Morgan. The growth, writes Internet sector analyst Doug Anmuth, is being fueled by advertisers shifting budgets from analog media to follow consumer time spent with digital media, especially Internet connected mobile devices, as well as continuing momentum of social media platforms like Facebook which announced a powerful search feature today to compete with Google, Yelp and LinkedIn.

“As consumer behavior and time spent online rapidly shifts towards mobile, we expect advertising dollars to follow,” Anmuth wrote in a report released to investors late last week, adding: “We are projecting Internet advertising in the U.S. to grow to $43.5 billion in 2013.”

The J.P. Morgan estimate represents a 17.4 percent gain over 2012 online ad spending levels. As a result, online media will be receiving one out of every four dollars in 2013 U.S. ad budgets. That being said, Anmuth estimates about half of that growth will be coming from mobile Web ad spending, and without the mobile component, the uptick in online ad spending would be only about 10 percent from 2012.


Two key tipping points have finally tipped. Do you think the surge in tablet adoption and online/mobile advertising is merely a coincidence? C’mon. You’re too smart for that. Do we really need to tell you where to focus your energies in 2013?


TAGS: Android, Tablets , iPad, notebooks, Apple, Doug Anmuth, J.P. Morgan, Gartner analyst Mikako Kitagawa, NPD DisplaySearch, Richard Shim, Facebook, Facebook, Google, Yelp, LinkedIn

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