galaxy note 4More phablets – smartphones with 5.5-7” screens – will be shipped this year than portable PCs, and phablet shipments will surge next year, surpassing tablet shipments, according to new market research from IDC.

Worldwide phablet shipments will reach 175 million units in 2014, according to a new forecast from the IDC Worldwide Quarterly Smart Connected Device Tracker, while shipments of portable PCs will total 170 million. Phablet shipments will surge higher in 2015, surpassing 318 million units and exceeding a forecast 233 million worldwide tablet shipments, IDC says.

Growing phablet shipment volumes are taking away from tablet shipments, IDC analysts note, with growth in 7-inch tablets slowing. IDC expects consumers will shift back toward buying tablets with larger screens, though not in sufficient numbers to offset the decline in shipments of smaller-screen tablets. That’s prompting market analysts to lower their forecasts for the tablet market in 2014 and beyond.

Phablet Shipments Boom
IDC forecasts phablets will grow from 14.0% of the worldwide smartphone market in 2014 to 32.2% in 2018. “With Apple expected to join the space in the coming weeks, we anticipate even more attention on phablets as larger screen smartphones become the new norm,” commented Melissa Chau, senior research manager with IDC’s Worldwide Quarterly Mobile Phone Tracker.

IDC expects that the combined market for phablets and smartphones will continue to increase as the smart connected device market matures and emerging markets account for a greater share of the market. IDC predicts that smartphones will represent about 70 percent of the total smart connected device market in 2014. That’s expected to rise to 75.6 percent by 2018.

Outside of mature markets such as those of the U.S. and Western Europe where consumers are likely to own a mix of PCs, tablets and smartphones, smartphones will be the one connected device of choice, according to IDC.

Falling average selling prices (ASPs) will contribute to smartphone growth. A phablet cost $568 on average in 2013 as compared to the ASP for smartphones of $320. IDC forecasts phablet ASP will drop to $397 this year, while the ASP for smartphones will fall to $291.

“Clearly, mobile computing is a space where consumers are still trying to figure out what mix of devices and screen sizes will suit them best,” Tom Mainelli, program vice president with IDC’s Devices and Displays, commented. “What works well today could very well shift tomorrow as phones gain larger screens, tablets become more powerful replacements for PCs, and even smart watch screens join the fray.”

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