Everybody Knew the Tablet Market was Growing But Nobody Expected This

The tablet market is getting bigger. Everybody knows that but when IDC released its 2012 report, nobody thought that it would report results like these.

According to the report, tablet shipments grew 78.4 percent year over year in 2012 representing more than 128 billion tablets shipped. This year tablet shipments are projected to overtake desktops and in 2014, they’ll be bigger than the laptop market.

According to the report, tablets should capture 16 percent of the smart device market by 2017—up 50 percent from the 2012 level of 10.7 percent. That represents total revenue of $814 billion with 83 percent of the market comprised of tablets and smartphones—up from 2012 levels of 70.8 percent.

If you thought that was impressive, the report projects that the smart device market will grow 174 percent between 2012 and 2017. All of this at the expense of the PC which will slide from a 12.4 percent market share last year to 6 percent in 2017.

But your laptop isn’t going to go the way of the desktop PC, will it? IDC believes that its market share will drop from 16.8 percent to 11 percent in 2017.

Bob O’Donnell, IDC Program Vice President for Clients and Displays, says, “Consumers and business buyers are now starting to see smartphones, tablets, and PCs as a single continuum of connected devices separated primarily by screen size.”

And what about the Samsung versus Apple AAPL battle? IDC reports that Apple gained ground on rival Samsung taking 20.3 percent unit shipment share versus Samsung’s 21.2 percent. In terms of revenue, Apple had a 30.7 share while Samsung had 20.4 percent.

What does all of this mean for the PC market? It’s not good news for companies like Hewlett-Packard HP. Microsoft MSFT wants to believe that it’s transforming into a company ready to capitalize on the mobile market, but so far there’s very little evidence of that. Its Surface Tablet, Windows phones, and Windows 8 operating system aren’t making significant inroads making the company ask what’s next.

Of course Dell DELL won’t be publishing the study results on its website any time soon but if there’s any good news, Dell is likely to die off in the hands of Blackstone BX, far away from retail investors if the PC does die off.

But this report is great news for other tech titans.

Despite ACI Research CEO Edward Zabitsky reiterating his $274 price target on Apple this week, the other 45 analysts are more confident in the company’s ability to continue being a leader in the space.

Other companies feeling good about the IDC report include AT&T T, Verizon VZ, Google GOOG, Intel INTC, cell tower stocks like American Tower AMT, and companies like Facebook FB that are quickly learning how to monetize mobile.