​Time for market leaders to reassess as tablet purchase patterns emerge

​Time for market leaders to reassess as tablet purchase patterns emerge

“Unless new compelling innovation or incentives to upgrade tablets are created, the churn of the mature installed base will continue to fall."

As the slowdown in purchases of personal technology continues, 17 per cent of consumer respondents in mature markets intend to buy a tablet in the next 12 months.

Recent Gartner findings suggests that this will force strategic leaders to reassess market opportunities in this category, as basic and utility ultra-mobile upgrade rates could fall by 10 per cent through 2016.

“Tablet innovation is driven by applications rather than by the hardware,” says Meike Escherich, Principal research analyst, Gartner.

“However, most applications work pretty well with first- and second-generation tablet hardware, and because the operating system (OS) can be upgraded for free, the user is not compelled to change the device.

“Users are less interested in the hardware and more interested in the applications and how devices using the cloud can interact with each other.”

The survey found that less than one in five users in mature markets are planning to purchase or upgrade a tablet, after surveying 19,000 consumers in the US, UK, France, China, Brazil and India.

Findings show that the penetration of tablets has reached more than 66 per cent of households in the US, with more than 25 per cent of households having two or more tablets.

“Unless new compelling innovation or incentives to upgrade tablets are created, the churn of the mature installed base will continue to fall,” Escherich adds.

“The worst-case scenario is that many tablet users will never upgrade or buy a new tablet as phablets and/or two-in-one convertible PCs (both with larger screen) envelop the benefits of a tablet.

“This scenario would result in real household penetration for tablets falling under 40 per cent in mature markets.”

Emerging markets

In emerging markets, the penetration of tablets is lower and filled with many lower-cost tablets.

In these markets, Escherich believes tablets need to complement smartphones.

However, the availability of Wi-Fi connectivity is limited, and cellular-connected tablets are as expensive as entry-level smartphones with screen sizes larger than 5.5 inches.

“We believe that smartphone demand will split into two screen sizes: 5 inches, and 5.5 inches and larger (defined as a phablet),” Escherich adds.

“Consumers choose between these two based on their device preference and lifestyle. Some consumers prefer smartphones at 5 inches or smaller for better portability.

“Others will opt for phablets for a more compelling mobile content consumption experience, finding little benefit in owning a 7-inch tablet that lacks phone capability.

“Some may choose 5.5 inches and larger if they tend to carry bags, while some may prefer 5 inches and smaller if they want to put their device in their pockets.

“Some budget-constrained consumers will prefer single-device ownership and will choose phablets as combining the best of both worlds.”

Overall, Gartner's consumer survey findings indicate that 48 per cent of respondents do not want to replace a device until they absolutely have to.

The purchasing process itself has become more complex, and consumers now have to prioritise which computing device is most important to them.

About half of the survey respondents plan to remain loyal to their current form factor, especially desktops (65 per cent) and standard laptops (46 per cent).

However, the survey showed that consumers seem increasingly uncertain about what device should replace their existing device, which points to users' wants and needs not being clearly met by current product offers as overlapping offers make the decision process increasingly complicated.

“Opportunities appear in the form of hybrids,” Escherich adds. “Demand for this two-in-one form factor is generated by tablet owners and standard laptop users.

“The dissatisfaction with standard laptops comes from issues around battery life, weight and boot up times.

“Others see the versatility of a hybrid meeting the needs of a tablet and a notebook, especially with the benefit of a keyboard.

“It appears the traditional PC is no longer a compromised device compared with tablets or even smartphones and appeals to consumers in a new, more versatile form factor.”

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