You are conflating several issues that have little to do with the topic of what happened to tablet sales e.g. Apple's iPhone sales drop is China is only tangentially related to tablet sales drop worldwide (fwiw I agree your diagnosis about lack of fashionable iPhone upgrades, particularly a new design. the other significant factor is spiking iPhone prices in international market due to exchange rate).
Tablet sales and upgrade patterns can't be directly compared to smartphones. Consumers upgrade their smartphones often because in key markets those purchases are subsidized (the single biggest factor in the iPhone's success was switching from a full price sale system of the original model to the subsidized system for the iPhone 3G). Tablets are more comparable to laptops/desktops. However iPad has even dropped below the Mac. Why is that? So back to the techcrunch article:
> part of the slow down in sales can be chalked up to user disappointment in the devices’ limitation following the initial excitement around the space... growing size of smartphone displays has gone a ways toward cannibalizing tablet sales, as well, limiting the need for a much larger device when so many handsets are now within the six-inch range. On the high end of the spectrum, convertible touchscreen Windows 10 devices have eaten into tablet market share, while Chromebook sales have begun to dominate the education market that tablet makers once saw as a key use case... Amazon marks a rare bright spot on that end of the spectrum, due to its relatively unique ability to subsidize costs as it positions Fire tablets as, essentially, content delivery devices...
When the iPad launched in '10 the iPhone was 3.5" and the laptops were big and bulky. In the following years that space for tablet growth was squeezed by large Android phablets and Macbook Airs (the 11" launched in a few months after the original iPad). Still the iPad, was proclaimed as the future of computing by Apple. It should have reached upwards to dethrone laptops/netbooks. The tablet problems are simple:
1) multitasking/multiwindow is basic on tablets and the UX is just not good enough, especially considering the disadvantages when compared to laptops/desktops with bigger screens
2) data/file management and sharing for projects spanning multiple persons and tools. iOS in particular is woefully lacking in this regard
3) poor input system. This is arguably the most critical factor. As long as a hardware QWERTY keyboard remains the most efficient way to provide text input then the laptop form factor, and OSes designed for that form factor, will remain dominant for productivity. An iPad with a hardware keyboard but without a mouse/trackpad is a sick UX joke resulting in arm fatigue.
More than anything else, TABLETS NEED A REVOLUTIONARY SOFTWARE KEYBOARD or INPUT SYSTEM. That should be Apple's or a YC startup's first priority.
(NB: tablets offer voice input, some actually decent, but that's obviously a nonstarter as general input in a noisy classroom, library, coffee shop, open office plan unless perhaps Apple can make a stenomask[1] fashionable. A revolutionary touch software keyboard still seems the best bet imo)
[1] https://en.wikipedia.org/wiki/Stenomask