Carphone Warehouse raised the stakes last week in the tablet market by selling a seven-inch tablet for under £50. At £49, just under half its normal price, the Avoca device has put tablets firmly into the impulse buy category this Christmas, alongside Tesco’s Hudl, a snip at £119, and Argos’s MyTablet, aggressively priced at £99.
It’s a far cry from 2010, when Apple kickstarted the tablet market with the high-end, luxury iPad. There are now 11.8 million iPad users in the UK, around 18.5% of the population, according to eMarketer. Around 20 million people use a tablet regularly in the UK, up 41.5% on the 14.1 million who did so last year. By 2017, more than half of Britons will be tapping away on tablets.
Apple sits with a 59% market share of the category it practically invented but it is the pending price war that will really unlock growth in the UK market. By 2017, Apple’s share will have shrunk to 40%.
Carphone Warehouse said that the looming price war will be fought with the family in mind. Speaking after it announced the Avoca tablet last week, CEO Graham Stapleton said: ‘We know that over a third of tablet purchases are for children and family use but that one of the main barriers to not buying a tablet is cost. Our Android 7-inch tablet smashes right through the lowest priced tablets and is perfect for families and anyone wanting a modern, portable tablet at a bargain price. I know a tablet will be top of many Christmas lists this year and this price makes top technology affordable for even more people, so we’re expecting this to be hugely popular.’
Apple of the market’s eye
Gartner said that when it comes to the tablet market, biggest is not necessarily best. It said: ‘Premium tablets are faced with continued priced decline in the seven-inch form factor as a larger number of consumers prefer smaller form factors when it comes to content consumption.’ It said that 47% of tablet owners have a device that has a screen that was eight inches or less, a smaller size than the iPad. Carolina Milanesi, research vice-president at Gartner, said: ‘Continuing on the trend we saw last year, we expect this holiday season to be all about smaller tablets as even the long-term holiday favourite – the smartphone – loses its appeal.’
While Apple is sticking with larger screen tablets, with the iPad Air shown off to the world last week, the new iPad mini with its eyecatching Retina display is a sign of how seriously it is taking the smaller screen market, albeit at a much more expensive price to its rivals.
Apple’s continuing policy of protecting its margins and focusing on high-end products has left a large gap at the low end of the market. Julian Jest, research analyst at Informa Telecoms and Media, said: ‘Consumers looking for a high-performing 7-inch or 8-inch tablet at a low-end price will not find such a device from Apple. Instead, tablets with similar specifications as the iPad mini from rival vendors retailing at $170 less, including the Nexus 7 from Google and Amazon’s Kindle Fire HDX, will continue to be popular alternatives.’
Looking below the Surface
Apple is unlikely to have it easy at the upper end of the market. Nokia’s first foray into the tablet market with the Lumia 2520 (see page 9) has initially impressed the industry and after its devices wing is bought by Microsoft, could lead to a reinvention of the software giant’s Surface range of tablets. David Phelan, mobile technology adviser at Carphone Warehouse, said: ‘The real stand-out is the Windows 8.1 tablet which will shake up the tablet market in the run-up to Christmas and is likely to give Microsoft a run for its money with its own Surface devices.
‘Nokia’s products have stunning designs and feel great in the hand. Nokia is hoping this will be a full-size tablet that will be comfortable enough to take everywhere and compete with established players on the market: early signs are very positive. Ultimately these announcements offer the consumer more choices to find the right tablet for them in the run up to the busiest shopping time of the year.’
So Nokia is the latest entrant into a market with excellent devices from the likes of Samsung, Sony, Apple, Google Nexus and Amazon. With the market for smartphones slowing, as more consumer Britons make the switch to Android, iOS or Windows Phone devices, tablets is the key opportunity for manufacturers to grow. Retailers are likely to be at loggerheads in a bid to snatch consumer spending.