Best Buy CEO says tablet sales are ‘crashing’
August 4, 2014 | 12:38 pm
Re/code has an interview with Best Buy CEO Hubert Joly in which he talks about a few things like fighting showrooming with pricematching, why people might want to buy gadgets in Best Buy rather than Amazon, and perhaps most interestingly, the sales rates for tablets.
We’ve mentioned before how the tablet seems to be replacing the laptop in terms of most ordinary consumers’ needs, but according to Joly sales have been starting to fall off. He believes this might suggest the market has just about reached saturation—all the people who wanted a tablet have gotten one, and they don’t see the need to upgrade just because one a little better has come out.
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.
Essentially, tablets are already about as good in terms of hardware as they really need to be, and people don’t feel like newer tablets have improved enough to be worth an upgrade. The market is essentially saturated.
I could see that being true. My Nook HD does most of the things I’d want a tablet to do almost as well as my Nexus 7—it even runs Plants vs. Zombies 2, one of the latest and greatest tablet games. Clearly, hardware has plateaued. You might be able to launch your apps half a second faster with a newer tablet, but is that worth spending the extra money? E-book reading doesn’t require a whole lot of processing power, either.
If people are stopping buying tablets, it might be time for Apple and Android tablet makers to start cutting back on their manufacturing numbers and new model introductions for a while and focusing on operating system upgrades. We’ll just have to see what happens.
Joly says that the slowing of tablet sales combined with the end of Microsoft’s Windows XP support means that there might be hope for a resurgence of the laptop 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.
I’m not so sure I see that happening, necessarily. Not when people prefer their mobile devices to be tablet-light now. Of course, I suppose you could get around that by redefining a tablet with an attached keyboard as a “laptop.” But as Abraham Lincoln said when he asked that riddle about how many legs a dog would have if you called a tail a leg, calling it one doesn’t make it one.
In the rest of his column, Joly explains that Best Buy fights showrooming by matching online prices “with a smile” (though some of the commenters on the article note that their price matches came with more of a hairy eyeball than a smile), and is a better place to shop than a single-brand boutique store because you can compare multiple brands and services objectively. He also insists Best Buy will still be around in fifty years. (I’ll believe that when I see it.)