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yARN: Tablet sales growth to come not at top, but lower end of market

yARN: Tablet sales growth to come not at top, but lower end of market

"A tablet in every room saves you from carting that iPad or Galaxy Tab around with you"

The boom in tablet sales is apparent to just about everyone, so Telsyte's finding that about 10 per cent of the Australian population (2.6 million) are using tablets should come as no surprise. Nor should the extrapolation that this will increase to 11 million by 2016.

The more people that see their friends, family and colleagues using tablets, the easier it is for them to visualise how one could be useful in their own lives. Web access simplifies and speeds so many transactional and information retrieval tasks (from paying bills and booking tickets to finding the secret code to make your DVD player region-free and comparing prices on a new fridge), and tablets are more compact and manageable than notebooks. Throw in offline tasks such as showing off photos, reading books, and watching videos away from a larger screen, and it’s an attractive proposition.

Apple’s strategy so far has largely been to maintain prices while progressively improving specifications, rather than driving down the price. (If the rumours are correct, we’ll find out this week whether that continues with the iPad 3.) That makes sense for a company that sets such store on profitability. And competitors - notably Samsung - seem happy to meet Apple’s price point for upmarket models.

As I previously wrote, most people seem to want an iPad, or at least something very similar. Indeed, the iPad is about the only tablet you see advertised in the mass media.

But my current feeling is that a lot of the sales growth for tablets is going to come at the lower end of the market. Premium tablets such as the iPad may remain as people’s first choice and their primary tablet, but with 7-inch tablets available for $50 or less at the Chinese factory gate (check alibaba.com if you don’t believe me), I’d be surprised if you couldn’t sell them at a profit here for $99, given enough volume to get economies of scale for shipping, customs clearance and so on. It’s then easy to imagine multiple tablets scattered around a home or office.

Just as a tablet frees you from going to a desktop PC or getting out and unfolding a notebook just to look up something on the web, a tablet in every room saves you from carting that iPad or Galaxy Tab around with you.

One in the bedroom replaces the alarm clock, plays Internet radio, subscription music, or tracks from your own collection. It also lets you check email, Twitter and so on, if you really must. (Yes, some people already use smartphones that way.)

One in the living room could serve as an advanced remote control for the AV gear, a web browser, and yes, tweeting about the program you’re watching.

One for the kitchen saves risking a premium tablet in a relatively hazardous environment, though a 7-inch model might be on the small side for displaying recipes.

And so on. The question is how good (and therefore how expensive) those tablets must be in order to be accepted for such purposes. iPad quality probably isn’t necessary everywhere, and a 7-inch screen is usefully bigger than a smartphone yet significantly cheaper than a 10-inch.

While I doubt tablets will ever become as ubiquitous as thumb drives, I suspect prices are falling to the point where conference organisers can think about giving delegates a tablet each instead of the usual satchel. It could be pre-loaded with the agenda and other event information, material from the sponsors, relevant apps (eg, session feedback, swapping contact details, guidebooks for the city, maybe even a Blendr-style app to help connect with other delegates in the same industry or other criteria), and so on. When the conference is over, they’ll quickly be repurposed.

So I have a feeling that the ‘one tablet, one user’ model apparently assumed by Telsyte may break down. Some people will be the sole users of one or more tablets, but I expect it will become increasingly common for groups of people (often, but not exclusively families) to share a pool of tablets. If usage does move in that direction, tablet OS designers will need to accommodate some form of user switching - while we’ll presumably use our personal tablets for the most private functions, being able to switch email, Twitter, Facebook and other accounts in one go would be a plus. As functions increasingly move to the Cloud from the actual device, the need for a personal tablet reduces and the ability to use whichever device is at hand will be demanded.


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