Bit by bit: Indian tablet market’s rags-to-riches story

Affordable tablets now command over half of the market share

The tablet market in India is seeing a big shift; in fact, this is the kind of shift you would only see in a market like ours. In all of a quarter, the volumes in the tablet segment have shifted towards the bottom end—those priced under $100. The top end of the market—devices priced over $300, essentially the domain of Apple and Samsung—has held steady, while the middle segment has seen serious erosion.

Karthik J, senior market analyst, Client Devices at IDC India, says that, in Q4-2015, about 54.5% of the devices shipped were priced under $100 (around R7,000). While 26.2% devices were in the $100-200 range, the $200-300 range earned a 13.8% share, and 5.5% devices were in the top range of above $300. Tanvi Sharma, analyst for Tablet Devices at CMR, attributes the marginal jump in overall numbers in the last quarter to some of the companies landing government deals. This could also be why the entry segment almost doubled its market share.

The growth of entry-level has been to the benefit of companies like Datawind. The creator of the sub-$35 Aakash tablet does not have a device costing more than R5,000. So while IDC gives Datawind a leadership position in Q4 with a 20.7% share, this translates to a dominant 58% of the lower-end segment, which, in itself, is more than half of the tablet market. Despite being pushed to the second position in Q4, Samsung is well in the lead for all of 2015.

Datawind CEO Suneet Singh Tuli says the trends are interesting because the middle-range segment priced between R10,000 and R20,000 has collapsed, while the sub-R5,000 segment has doubled. “Everything we do is in this band, and we are the only brand per se in the segment,” he says, adding that the pressure is now on him to sustain this position. “My belief is this segment will continue expanding, primarily because of consumer interest.”

The affordable segment has been there for a few years, but poor hardware quality put off people who brought into this price bracket in the initial stages. This meant people avoided the really cheap tablets for a few quarters. Now, Moore’s law seems to have improved the experience in this segment, reducing the differentiator with devices priced above this segment. Tuli says Datawind’s growth is driven primarily by parents picking up devices for their school-going children, and this is why he expects more growth in the coming quarter.

The other interesting trend in the Indian tablet market is how people now seem to prefer connected devices. CMR notes that 75% of all tablets sold in India in 2015 have cellular connectivity. The 4G devices, on the other hand, are now just about 7% of the overall numbers, but could end up making big inroads in the coming quarters thanks to the countrywide rollout of LTE services.

However, this does not, in any way, suggest that the tablet market is looking up. Growth has been flat at best and people are still struggling to find value in a 7-inch tablet when they can buy a 6-inch phablet with calling features and full functionality of a phone. The only way to increase uptake will be to make tablets more productive, something companies have been struggling with for years. However, with the Microsoft Surface Pro 4 and the Apple iPad Pro, things are looking up. Both are powerful devices that can replace computers and could find traction in the enterprise space soon. Meanwhile, Apple is expected to launch a smaller version of the iPad Pro this week.

Source | Financial Express | 22 March 2016

Regards

Pralhad Jadhav

Senior Librarian

Khaitan & Co

Upcoming Event | National Conference on Future Librarianship: Innovation for Excellence (NCFL 2016) during April 22-23, 2016.

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