After a spectacular surge in the mobile phone segment, the Indian information technology (IT) sector is witnessing a new trend – the rise of the Tablet Computer. Tablet computers or simply, Tablets, are touch-screen operated mobile computing devices without a physical keyboard.
Tablet sales have recorded a robust growth ever since the introduction of the iPad in India, and if industry estimates are anything to go by, this is just the beginning. The Manufacturers Association of IT (MAIT) has estimated the segment to grow at a compounded annual growth rate of 40% from 2011 to 2015. In a country like India, where the penetration of the computer with internet in urban households is just 8 percent and as low as 1 percent in rural areas, this is nothing less than phenomenal.
The growth story
MAIT expects sales to grow from 0.95 million units in 2011-12 to 7.3 million units by 2015-16 [Exhibit 1]. A report by CyberMedia Research predicts an even stronger sales growth rate of 100% for the year 2013. While numbers may vary, there is a definite upward trend in the market. Global sales forecasts reveal a similar story, however the Indian market is expected to grow at a faster pace, occupying a bigger share of world Tablet sales by 2015 [Exhibit 1].
Due to their form, portability and weight, Tablets are primarily meant for internet consumption on the go. However, consumers now use Tablets for a variety of purposes ranging from the traditional uses like checking their e-mail and reading books to online social networking, accessing multimedia and gaming [Exhibit 2]. Due to the growing number of applications and other support features in the Tablet ecosystem, they have tremendous potential even in corporate houses, the industry and government offices. Various industries such as healthcare, public services and especially education, have already adopted the Tablet.
Consequently, companies have also altered their value propositions to suit this plethora of needs. Reliance tabs, for instance, is focusing on the youth. On the other hand, Micromax is trying to penetrate the education segment through its FunBook. HCL Infosystems is trying to build applications for verticals like healthcare, pharmaceuticals, banking and financial services. By strengthening their marketplace, HCL aims to carve a niche for its Tablet computer. Similarly, Lenovo is providing content in vernacular languages, in an attempt to provide a local flavour to their Tablets.
A major part of this initial demand has been fuelled by Government purchases. Kapil Sibal, the minister of communications and IT said, “This is our answer to M.I.T.’s $100 computer,” during the announcement of the Aakash project in 2010. Government efforts to subsidize the Tablet and also provide relevant training to teachers have gone a long way in boosting initial sales figures. However, the government does not plan to stop there. According to Suneet Tuli, the chief executive of Datawind – the company that supplies Aakash Tablets, the government ultimately aims to see an Aakash 2 in the hands of each one of India’s 220 million students. If this is true, Tablet sales will ride on the back of government purchases for a long time [Exhibit 3].
Affordability is yet another lever that has pushed Tablet sales upwards. Gartner analysts have identified three distinct price segments – the iPad, the sub Rs 25,000 Tablet and the Rs 10,000-Rs 15,000 Tablet. In addition, the prices of the low cost segment are expected to follow that of smart-phones which are currently expecting a downward trend in price. This availability at different price points has partly occurred due to tremendous fragmentation in the market. There are currently over 70 different models of Tablets launched by more than 10 companies and the number is only increasing.
Another important factor responsible for the growth potential of Tablets is enterprise adoption. Take the case of Bharti Airtel, India’s largest mobile telephony services provider. After presenting its directors with the Tablets, it has shifted from leather pads and files to a strict ‘iPads only’ policy in the boardroom. Other companies are also expected to realise their potential in the office and follow suit. In addition, the ‘bring your own device’ concept which is getting popular in companies, will also lead to greater acceptance of Tablets in these enterprises.
Availability of applications and multimedia consumption are other key elements that drive the growth in this industry.
Despite portability, good processing speeds and a variety of applications at their disposal, the user experience is marred due to poor internet connectivity. Unlike in the west, 3G connectivity in India, is not robust and the Tablet has limited utility without a good internet connection. Scarcity of public wi-fi networks in the country also adds to the problems with connectivity. Tablet-makers like Samsung and Reliance have realised this issue and are taking steps to make internet access readily available. Reliance, for example, bundled their Tablet with 3G to observe an immediate impact on sales.
In addition, lack of consumer awareness about the potential of Tablets, as well as the inability of the existing application range to reach all segments within the country may pose as potential hurdles to the sales trajectory. To thrive in the market, producers will have to find solutions to these issues while not compromising on the overall value-proposition of the offering.
To sum it up, the same features of mobility, affordability of devices and low tariffs that have made mobile phones ubiquitous within the country, are expected to give rise to tremendous growth in the Tablet computer market too. Trends indicate that Tablets are here to stay. However, despite strong drivers like government procurement, corporate adoption and affordability, companies will have to find means to overcome the challenges caused by poor connectivity and lack of awareness. Only then will they be able to sustain the promising growth potential of Tablets in the country.
- India tablet computer sales to double in 2013: research. (2013, January 7). Hindustan Times.
- India unveils tablet education initiative. Will the US follow suit? (2012, November 14). The Economist Group.
- Jayanth Kolla. (2011, August 8). Key Drivers for Evolution of Tablets in India. Convergence Catalyst Blog.
- Joji Thomas Philip & Gulveen Aulakh. (2011, August 27). The Economic Times.
- Pamposh Raina, Ian Austen & Heather Timmons. (2012, December 29). An Idea Promised the Sky, but India Is Still Waiting. The New York Times.
- Tablet market in India to grow 40%, to cross 1.6 million units in 2012-13: Study. (2012, October 19). The Economic Times.
- Tablet PCs have good growth prospects: Gartner. (2012, February 20). Business Standard.
– Sahil Patwa
Sahil is a PGP 1 student at IIM Ahmedabad and a member of the Consult Club. As an Associate Consultant at Ernst & Young, he was involved in the launch of India’s first domestic debit-card system and other projects in the electronic payments space. He is passionate about technology, new business development and Web 2.0. Sahil holds a B.Tech in Mechanical Engineering from IIT Bombay.