It’s raining tablets, ABHISHEK LAW As many as 90 vendors are competing for a pie of the growing tablet market.
Competition in India’s tablet PC market is boiling over. At prices beginning as low as Rs 4,000, Indian vendors seem to have moved on from the days of Akash to a time where the price-conscious Indian customers are spoilt for choice.
Currently, there are nearly 90 vendors with tablet PC offerings that include handset vendors Micromax, Karbonn and Intex who have extended their portfolio. Newer entrants include Pantel, WishTel, Zync Global and Teracom among others.
According to estimates by CyberMedia Research (CMR), till June this year, the number of such vendors increased by 50 per cent - to 90 from the 60 in the earlier part of 2012.
“The days of Akash are long gone in terms of products offered (at the low end segment),” says Faisal Kawoosa, lead analyst - telecoms at CMR.
These Indian vendors are already giving a tough fight to the big multinational tablet makers such as Samsung. If shipment volumes last quarter are considered, according to CMR, three Indian vendors – Micromax, Karbonn and HCL – feature amongst the top five (the other two being Apple and Samsung). Micromax ships nearly 60,000–70,000 units a month.
POPULARITY
Invariably, price war has been the biggest fallout of such a lop-sided competition - where Indian vendors compete just on volume instead of value.
According to CMR the average selling value of tablets in India, in the April to June quarter (2012), halved to nearly Rs 13,000 from Rs 26,000 in January to March period. Uptake of tablets has increased to 5.5 lakh – a 673 per cent jump over the year-ago period!
Pantel Technolgies, previously a design house, claims to sell nearly 70,000 units across its portfolio that ranges between Rs 4,000 to Rs 15,000. Of these 40,000 alone is in the low-end segment of Rs 4,000.
Similarly, Goa-headquartered Teracom Ltd - previously an optical fibre cable and customer premises equipment maker - claims to do monthly business of Rs 10-12 crore (roughly 20,000 to 30,000 units). Both Pantel and Teracom have partnered with Bharat Sanchar Nigam Ltd in a bid to target Tier 2 and 3 cities.
PRICING AND QUALITY
Numbers sound impressive. And market analysts maintain that aggressive pricing will see good off-take of low-end devices (priced below Rs 5,000) initially. However, things might be different in the long-run.
“In the short-run, aggressive pricing has its prospects. But one has to see what user feedback and concerns are in the long-run,” Kawoosa said.
Already issues of poor touch-screen and lack of service dog some Indian vendors.
“Unlike mobile phones, price is not a differentiator in tablets. One cannot compromise with touch screen quality or after-sales service. You need innovation too,” Kunal Bajaj, an independent telecom analyst maintains.
Incidentally, Micromax’s CEO, Deepak Mehrotra, too is apprehensive of price being a seminal factor.
According to him, days of sub-Rs 5,000 tablets being mass market movers are still far away. An ecosystem has to evolve before the benefits trickle down as economies of sale.
“I think there is still time before a sub-5000 becomes popular. People are price conscious but they are willing to stick to value for money offerings without compromising on quality,” he maintains. Micromax’s tablet range is priced between Rs 6,000 – 10,000.
The idea is to understand consumer requirements first and then have a product depending on the captive consumers, he adds.
PRODUCT PLACEMENT
Quite appropriately, the tablet market is now sub categorised into low-end (below Rs 5000), mid-end (Rs 5,000 to Rs 10,000), high-end (Rs 10,000 onwards) and super high-end (Apple and Samsung).
Products are being placed keeping in mind lower-end offerings for tier III and IV cities, 2G or dongle enabled offerings for rural areas, tie-ups with school and educational institutions with pre-loaded content, good camera quality and auto-focus for medical representatives and bankers, higher battery life, better sound and picture quality for movie viewing and so on.
Vendors are trying to have a tablet for every occasion. HCL Infosystems, for example, has launched a tablet aimed at education. Frost & Sullivan expects the Indian tablet market to 23.38 million units by 2017, with sales doubling every year starting 2011.
“I think there lies a huge opportunity which can be tapped. But a tablet should have its own consumer requirements. Sub-standard products will fall through,” Sashin Devsare, executive director, Karbonn Technologies says. Consolidation might happen in the sub-Rs 5000 brands as there are too many “me too” products.
MARKET UNCONVINCED
According to Sandip Biswas, director, Deloitte in India, most tablet purchases are impulsive decisions. Serious users will opt for the super high-end offerings that include an Apple or Samsung.
“A major chunk of tablet purchases are by non-serious users who seldom go beyond gaming. Just 5-10 per cent buyers do so because of the utility involved. It’s still early days for tablets in India,” Biswas adds.
With Microsoft being the pre-dominant operating system (OS) in Indian PCs and laptops, switching over to a new OS might be time consuming. The company’s decision to get into the tablet segment might also influence the market, he pointed out.
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