Should tablets be counted as PCs in sales figures?

Should tablets be included in PC sales figures and forecasts? Earlier in the year the folks at Canalys decided to look at how the major vendors fare when you factor tablets into overall PC shipments numbers.

The results, shown in the chart below, are fascinating. When including tablets (reported in millions on the y-axis), Apple is the world's leader in PCs with a 27 per cent market share. Its closest competitor, according to Canalys, is HP with a 15 per cent market share, followed by Lenovo at 14.8 per cent and Samsung at 11.7 per cent.

In the PC research community, counting tablets as PCs is quite controversial. Until recently, PCs were defined as desktops or laptops and their shipments were counted quarterly as such. But if you strip down a tablet, you'll find all of the same basic technologies on the inside. If you decide to count tablets, though, it becomes a slippery slope. Do you count the smartphone as well? After all, its profile is similar because it also has a motherboard, CPU, screen, radios, and multiple I/Os. For all intents and purposes, the smartphone is a PC too.

By this logic, we should count smartphones as PCs. But historically that has not been the case for one key reason: It is much easier to track these products individually rather than lump all of them into a single PC category. Also, we have a solid track record of following individual shipments since it is easier for us to explain the ebb and flow of products separately instead of trying to dissect and analyse them as part of a single product category.

However, it may be time for the industry to rethink this tracking method as tablets are being used more like computers these days. In the IT world they are every bit a PC. They have become mobile workhorses and are used for as much as 80 per cent of traditional computing tasks. They are taken to meetings, used to create and give presentations, and manage email. With a Bluetooth keyboard, you can even create content in much the same way you would using a laptop or PC. Larger tablets are often used for productivity in the home as well as for content consumption.

To underscore this issue, come autumn the market will be flooded with 2-in-1s, essentially laptops with screens that detach or fold back to become tablets in their own right. My colleagues plan to track these as actual laptops in their shipment counts, but is that fair? Aren't they tablets too? Should we consider how much time the person will spend using a 2-in-1 in tablet versus laptop mode?

To complicate matters further, 7in tablets are basically constrained to being content consumption devices. They are rarely used for productivity and in fact they make up about 80 per cent of all tablets shipped. For this reason market researchers are reluctant to define tablets as PCs in the traditional sense since almost everyone emphasises the productivity side of PCs and laptops.

Perhaps then we could add only the larger tablets into the PC shipments mix since they too are clearly being used for productivity. If you assume that Apple's larger 9.7in iPads represent about 20 per cent of the 22.9 million total iPads shipped last quarter, then with the Macs and larger tablets combined, Apple actually shipped 8.7 millions PCs. The majority of Samsung tablets sold are 7in models and I suspect the larger models represent only around 12 per cent of all of its tablets sold. That would put Apple behind HP and Lenovo in total PC shipments but still ahead of Samsung and Dell in combined PC, laptop, and large tablets shipped.

This may seem like a purely academic exercise, but it’s a hot topic for the industry. The issue has many tablet vendors lobbying for tablet inclusion because they cross so many lines within the world of productivity. At first glance this move could really boost Apple's total PC shipment numbers, but Samsung has its sights set on its larger laptops being used in business settings, as do all of the traditional PC vendors with Windows 8 standalone tablets in the market now.

Being the PC leader is still a surprisingly big deal to PC vendors, in part because it impacts how the financial community perceives them. Ironically, bragging rights for PC vendors go back to 1982 when IBM overtook Apple almost overnight as the number one PC vendor. With demand in traditional PCs declining, the idea of adding larger tablets – and perhaps smaller ones as well – to the PC mix has become more important to vendors and those in the financial markets who track and invest in them.

Because of this lobbying, market researchers, who play a key role in vendors' strategy and the financial world, are being urged to rethink what a PC is. I applaud Canalys' bold step in this direction and it will be exciting to see how many other market researchers follow suit.