Tablet Sales: Taking a Hit

The shake-up in the tablets market has left only the serious and established players in the reckoning. What next?

The hysteria over tablets seems to be diminishing as is evident by sales numbers of these devices for the first three months of 2014. According to the IDC (International Data Corporation), shipments of tablets from India for April-June 2014 stood at 0.8 million units - a 32.8 per cent drop over the corresponding period in 2013.

In July 2010, when first tablet was introduced in India, everyone was bullish about its success and, till last year, shipment numbers suggested the same. But it is a different story now.

Diminishing returns

According to the IDC, sales were falling primarily because there were no new buyers in the market. But there's more to it. According to market analysts, the other factors affecting growth are a fall in the number of brands selling tablets, registration of vendors with the Bureau of Indian Standards (BIS), emergence of the phablet and the lack of a decent user-experience in low-cost tablets.

Just a year ago, more than 60 marketers were selling tablets in India through physical retail stores and online shopping portals. Today, that number has dropped below 30, of which 15 are established MNC and Indian brands. The reason for the disappearance of so many marketers is a directive from the government last year, making it mandatory for 15 categories of electronic and IT products (including laptops, tablets, printers and scanners) to be registered under the BIS. The idea was to certify them for their safety, quality and health implications under Indian conditions.

This saw the exit of many fly-by-night brands that had priced their products below Rs 5,000 to lure customers, without paying attention to quality. Today, only the serious and established players are left in the market but they have tablets with a price tag of above Rs 6,000.

Karan Thakkar, senior market analyst of tablets, enterprise client devices and PC monitors at IDC India said, "The BIS compliance clause is certainly hurting the white-box (assembled PCs) market. International device vendors like Apple and Samsung grew in comparison to January-March 2013, posting significant double-digit growth rates in the first quarter of 2014. Overall, however, branded vendors were unable to capitalise on the space left vacant by the white-box and smaller vendors."

The challenger

The phablet too has played spoilsport for the tablet segment. A phablet (phone-cum-tablet) usually has a screen size ranging from 5 inches to 6.9 inches. Tablets are bigger - at 7 inches. A typical tablet comes with around 10 mm bezel (rim); while in phablets this space is just 4 mm. The difference contributes significantly towards the overall dimension and weight of the devices.

For instance, the Samsung Galaxy Mega 6.3, the largest phablet in the market, measures 167.6 x 88 x 8 mm and weighs 199 g. On the other hand, the latest Samsung Galaxy Tab 3 7.0, with only a marginally bigger display of 7 inches, measures 188 x 111.1 x 9.9 mm and weighs 306 g, which makes it about 50 per cent heavier, 20 per cent wider and 8 per cent taller than the Mega 6.3.

A tablet with a 7-inch display offers significantly more space than a 5-inch phablet. The 2-inch difference means a 33 per cent bigger display. However, what is important is that while phablets can easily slip into the pocket, the tablet cannot.

Another aspect of display is resolution. Though entry-level tablets and smartphones come with high-definition resolution, the pixel density is much lower in the former due to bigger display sizes. For instance, if a 6-inch and a 7-inch tablet come with the same pixel resolution (1280x720), the pixel density in the tablet will be 209 pixels per inch (ppi), while in the 6-inch phablet, it will be 244 ppi - a significant difference in terms of clarity. Moreover, it is more inconvenient using the tablet for talking.

At present, about four phablets are launched every month. Since they have screen sizes ranging between 5 and 7 inches with dual functionality (of a phone and a tablet), they are cannibalizing into the market share of 7-inch tablets.

Size matters

All is not that bad for the tablet market opines Karan Thakkar, senior market analyst with IDC, who believes that most of the growth will come from tablets with display sizes of 8-inches and above. "The popularity of phablets has, in fact, overtaken the demand for just the 7-inch tablets and their return rates have been inexplicably large," he says, adding, "First-time users, latching onto such devices, are now looking to move to products that offer better experience in terms of life span and quality," he explains.

The pathetic user-experience of entry-level tablets - mostly by unknown brands - hasn't helped at all. These 'budget tablets' lacked processing power that made the user regret his purchase decision. Lack of storage made it difficult for consumers to store lot photos, music, videos and heavy files on the device. Lastly, 24X7 connectivity could be accessed through Wi-fi only. In short, hardware was the pain point.

Michael Adnani, VP retail business, Flipkart, also echoed the same sentiment during the launch of DigiFlip, FlipKart's own tablet and said, "Tablets did not grow the way it was expected in India because they are not rightly priced and then there are tablets which lack the quality that consumers expect."

So what does the future of tablets look like in India? According to industry players, 8-inch tablets will be in demand and there is immense potential, particularly in the field of education for usage of tablets.

Learning curve?

A tablet is a lightweight device and can store every book a student might need - from kindergarten to post graduation (even curriculum can be revised and updated at regular intervals). They can become a catalyst for ushering a new, technologically driven educational system.

Tablets can also administer tests, enabling students to engage in collaborative projects or group discussions, apart from adding life in the form of video or pictures to mundane text which one is used to seeing in textbooks. On the business side, individuals or companies can earn money by providing hardware, software, maintenance, content and connectivity to such users.