Best Buy Boss: Laptop Sales Up But Tablets 'Crashing'

Big box retailer Best Buy (BBY) chief executive Hubert Joly told Re/code in a recent interview that the company’s laptop sales are reviving but tablets are “crashing.” Why? Evolving consumer choice, of course.

Joly didn’t offer any sales specifics but one look at IDC’s Q2, 2014 tablet figures tells the story. The researcher said Q2 tablet growth was confined to 11 percent year over year, a paltry rate when compared with the segment’s lofty advances of the prior two years. While Lenovo posted a 65 percent sales jump and ASUS recorded a 13 percent uptick for the quarter, market dominator Apple (AAPL) slid 9 percent and runner-up Samsung’s tablet sales showed a meager 1.6 percent uplift. One keen indicator of the market’s weakness is Amazon’s (AMZN) tablets didn’t even make IDC’s top five.

Here’s some excerpts from Joly’s Re/code interview.

On PC sales.
We’ve actually had a revival of the PC business at Best Buy. Part of it was that Microsoft stopped supporting the old version (Windows XP).

On tablet sales.
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 … If you take [Microsoft’s] 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.

On slowed tablet sales.
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 … 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.

On smartphone sales.
In the U.S., we are now achieving levels of penetration that are quite significant and it’s evolving now into more of a replacement market. So, it’s still huge volume, but you don’t have the same growth here in the U.S.

On Best Buy’s strategy.
We’ve taken price off the table. And therefore the customers can take advantage of the service we provide: the advice, the Geek Squad, and the advantage of being able to pick up [online orders] in the stores. Or, if they didn’t like a product, they can return it to the store. So, we have unique things to offer that combine online and offline assets.

On Best Buy’s future.
We’ll be around in 50 years. We have a unique role to play for customers.