Best Buy CEO: Tablet Market 'Crashing'

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The tablet is one of the fastest-growing products in the tech industry, with over 195 million sold worldwide in 2013 and over 116 million in 2012, according to Gartner.

So how could a product selling at this rate over the last two years, have the head of one of the country’s leading tech retailers saying, “The tablets boomed and now are crashing.”

That’s what Best Buy CEO, Hubert Joly, said in an interview with Re/code published Wednesday, calling the fast growth in the tablet market a “phenomenon.”

[Related: That's About The Size Of It: Tablet Market Declines For The First Time]

“The volume has really gone down in the last several months. The issue has then been that, once you have a tablet of a certain generation, it’s not clear that you have to move on to the next generation,” Hubert said of the consumer market for tablets. “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.”

To his point, the tablet market declined for the first time in the first quarter of this year, with 56 million tablets sold worldwide compared to 59 million in the year-ago period, according to research firm NPD DisplaySearch.

IDC believes the tablet market is still set for growth this year, albeit at a slower pace than previous years. The research firm reported 49.3 million tablets sold worldwide in the second quarter, up 11 percent from the year-ago period.

Apple and Samsung, the top two tablet vendors based on market share, both saw their sale numbers take a hit in the second quarter.

Samsung described its tablet sales as “sluggish” in its second -quarter earnings estimates posted earlier this month, stating that an increase in demands for phablet phones has taken away from the smaller-screen tablet market. The Korean conglomerate also said Chinese venders, such as Lenovo, have put a dent in its sales numbers.

Samsung's market share dipped from 18.8 percent to 17.2 percent in the second quarter, when it sold 8.4 million tablets, according to IDC.

Apple's market share fell from 33 percent to 26.9 percent in the second quarter, when it sold 13.3 million tablets.

This is the first time Apple has lost market share in sequential quarters since the launch of the iPad in 2010, according to IDC.

Next: Partners Take On Tablet Market

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