The tablet market has seen its first annual decline since the launch of the iPad in 2010, following the growth of phablets and convertible PCs.
Research firm Canalys broke the news, claiming only 67 million units were sold in Q4 2014, a 12 per cent drop year-on-year for the industry.
The two main tablet sellers - Apple and Samsung - both noted large drops in shipments at 18 and 24 per cent respectively. Some smaller suppliers such as HTC, Sony, HP and Dell noticed small gains in marketshare.
Phablets have been a hot commodity in 2014, especially in Asia where both Apple and Samsung have had the most success. The iPhone 6 Plus, Xiaomi Redmi Note and Samsung Galaxy Note 4 were some of the most popular devices in South-East Asia.
The lifespan for tablets is also larger than Apple expected according to CEO Tim Cook, with many customers holding on to their first or second generation iPad instead of upgrading.
The decline seems to be affecting both high and low-end tablets, since phablets are available at any price range now. Low-end tablets tend to have a lower lifespan however, making it easier for customers to upgrade.
Apple might be looking into creating a convertible to fix some of the demand issues in the tablet market. This convertible will feature a removable keyboard and some pre-loaded business applications, and might be named the iPad Pro.
Microsoft noticed large gains in the convertible market in 2014, selling three times the Surface volume in 2014 compared to 2013. The Surface Pro 3 has become a well-liked product with some of the new changes and accessories available.