For Apple, it has been the best of times. For its competitors, well, the good news is that it has been worse. In the U.S. and, really, the world, there are two tablet markets. Apple sells millions of tablets in a debut weekend; its competitors sell, collectively, millions of tablets in three months.
iGR’s ongoing U.S. consumer research suggests that there are three types of prospective tablet customers: those who want an iPad, those who do not and those who are not sure.
There is very little an Android OEM can do, for example, to win over someone interested in an iPad. The path to unit sales growth for that OEM — be it Android, QNX or Windows — is to win over the undecided crowd or win over someone interested in a competitor’s product.
Android on the rise
iGR’s latest research shows that in May 2012, 54 percent of consumers reported using an Apple iPad down from 64 percent one year earlier in May 2011.
Conversely, Android penetration has risen from 13 percent in May 2011 to 32 percent in May 2012, mainly due to Amazon’s Kindle Fire.
The latest research also shows that the average price consumers are willing to pay for a tablet (of all types) is approximately $275.
Price they’re willing to spend
In March 2011, the average price survey respondents were willing to spend was approximately $335 — the average price intenders are willing to pay has therefore dropped by $60 in 12 months.
Note that both these values were calculated on similar price ranges and reflect the average price regardless of the type of tablet the respondent was interested in.
“Price is still the leading factor that impacts tablet purchase but consumers appear willing to pay more for an Apple iPad,” said Iain Gillott, president and founder of iGR, a market research consultancy focused on the wireless & mobile industry.
“Battery life is the second leading buying factor for a tablet, ahead of the speed of the processor and other factors, including the size of the screen.”
Apple has again met expectations and upped the ante with the added features in place for the new iPad.
The new device is the first Apple product to include 4G LTE Technology. Together with the HD retina display that is four times the number of pixels in the iPad 2 screen, Apple is trying hard to ensure that it remains the dominant market player in the tablet space.
Jayesh Easwaramony, vice president, ICT Practice, Asia Pacific, Frost & Sullivan said, “The new iPad is a global product that caters to an evolved market of mobile internet users with strong purchasing power; it will attract consumers in the more developed markets of the Asia Pacific region like South Korea, Singapore, Japan, Hong Kong and Australia.”
He added, “iPad currently rules the tablet category by a wide margin with a close to 70% market share. The new iPad further protects its interests by building in more attractive features such as the HD display and more processing power to continue its dominance as the ‘defacto’ tablet of choice.”
The Tablet PC market is still a relatively nascent one, which is good for Apple.
The overall market is still growing at a rapid rate so the size of the revenue pie will increase strongly in a market which Apple is clearly dominating. In contrast, the smartphone market which continues to grow is now starting to mature, so replacement handsets now make up a lot of purchases whereas first time buyers still occupy a large slice of the Tablet PC market.
Smartphone market more of a challenge
Phil Harpur, senior research manager, ICT Practice, Australia & New Zealand, Frost & Sullivan said, ”The smartphone market is becoming more and more of a challenge for them as the market matures and competition grows, mainly from smartphones running the android platform.”
Harpur also noted that competitors are still behind Apple in terms of features and functionality though he commented that Samsung and Asus have some interesting releases. Yet no brand has really produced anything that truly challenges Apple in the Tablet PC market that would significantly eat into Apple’s market share. This may change over the next year or two as it did in the smartphone market, but it will be a gradual process.
Phil added, “Competition is constantly heating up and market expectations are no doubt much higher. While Apple will be able to, to a significant degree, ride the strong wave of momentum it has built in the market with this new iPad release, with each release the market will be expecting more and more.
“Apple is already facing challenges in the smartphone market from competitors with functionality which is getter closer and closer to theirs. Such challenges will continue over the next two to five years. However one trump card that Apple does have in its favor is its domination of the application market with its App Store for its iPhone, iPad and iPod.”
Annual revenues from consumer mobile applications will approach $52 billion by 2016 as consumer smartphone adoption accelerates in tandem with the emergence of a mass tablet market, according to A new report from Juniper Research.
The report finds that the introduction of operator billing across leading storefronts such as the Android Market and Ovi Store had led to a dramatic rise in revenues. Likewise, the mass deployment of in-app billing options meant that, for many storefronts, post-download revenues had surpassed those of PPD (Pay-Per-Download).
While smartphones will continue to comprise the majority of app revenues over the forecast period, the report noted that tablets — which currently account for just 7% of global app revenues — would comprise 25% of such revenues by 2016.
HTML5 heightens publisher D2C opportunity
The report observed that the app store model’s pre-eminence faced the prospect of erosion in the longer term as HTML5 — a markup language which reduces end-user dependence on plug-in app technologies — facilitates the transition to a browser-based environment. Additionally, the closer integration between web-based apps and handsets should mean that the advantage that native apps have is reduced.
This in turn offers great opportunities for content publishers to offer content on-site rather than be reliant on storefront distribution. Nevertheless, as report author Dr Windsor Holden noted, “While we are likely to see some larger media publishers — particularly those dependent on subscription revenues — migrating to a direct-to-consumer model (D2C), this is by no means true for the majority of companies.
Most do not possess the scale of traffic to make D2C a viable option: in most cases, the storefront will continue to be the optimal discovery and distribution mechanism.”
Other findings from the report include:
Most network operator storefronts will struggle to attract developers due to lack of scale
More than 31 billion apps downloaded to mobile devices in 2011
The Mobile Apps whitepaper is available to download from the Juniper website together with further details of the full report, “Mobile Apps Stores: Future Business Models & Ecosystem Analysis 2012-2016.”
Consumers are driving segmentation of the fast-growing tablet market away from one-size-fits-all models toward different devices for distinct purposes, according to a new survey of 8,700 consumers in the eight top markets worldwide.
The research, conducted by The Boston Consulting Group, confirms trends BCG first observed in a similar survey more than a year ago and points to tablet purchasers’ growing desire for choice in functionality, price, and supporting ecosystem.
“The door is open to iPad competitors that can offer attractive combinations of size, features, price, software, and services optimized around a particular use or uses,” said Joachim Stephan, a BCG partner and coauthor of the study.
The results of the research will appear in “Not Carved in Stone: Consumer Trends and Market Segmentation,” the most recent article in BCG’s Tablet Market series to be published today onwww.bcgperspectives.com.
Willingness to Pay Is Rising, but Consumers Want Choice
U.S. consumers are willing to pay from $140 to $240 for a multipurpose tablet — an increase (at the midpoint) of $35 since 2010.
In Europe, willingness to pay has jumped about $100 in the past year and is now generally in the $250 to $350 range. The Chinese consumers that were surveyed — Internet users in major cities — were willing to pay from $280 to $440 for a tablet, or $185 more than in 2010.
“The iPad is great but expensive for a lot of people,” said Dominic Field, a BCG partner and coauthor of the study.
“Early results suggest that Amazon’s Kindle Fire, priced at $199 in the U.S., has found the sweet spot. Other companies are targeting this zone as well, as evidenced at the recent International Consumer Electronics Show, which featured several tablet introductions at prices in the $170 to $250 range.”
Personally, it’s not just the price of the Kindle Fire we found attractive, but also the 7-inch size. We tested 10-inch tablets that grow heavy in the hand after a time and are awkward to use as a camera (the Kindle Fire does not have a camera or a microphone, lacks it may fix in future incarnations). But it is much easier to use for playing games, watching video, reading or Web surfing.
Tablets’ Market Share Growing at the Expense of Other Devices
Tablets and e-readers are attracting considerable market share from home PCs, laptops, portable media devices, and netbooks. Approximately half of the consumers surveyed plan to purchase a tablet rather than a netbook. One-third are considering a tablet over a home PC or laptop. One-third are considering an e-reader instead of a netbook or portable media device, and one in five is also thinking about choosing an e-reader over a PC, laptop, or smartphone. Among tablet owners, one-third to one-half report that their tablets are likely to replace their PCs, laptops, netbooks, and portable media devices.
Consumers Worldwide Want a Windows Tablet for the Work Environment
Currently, tablets are being used mainly for personal activities such as e-mail, Internet surfing, and social networking. More than 90 percent of U.S. tablet owners use their tablets at home in the evenings — and 80 percent say they use them in bed.
The survey found that many consumers would prefer to use tablets for work as well, but two factors in particular appear to be holding them back. One is speed: faster performance was cited by more than two-thirds of all consumers as likely to increase their tablet usage for work. The second is the absence of a Windows-based device.
U.S. and Chinese consumers BCG surveyed in mid-2011 expressed the desire for a tablet running Windows. Two-thirds of all consumers in this — our latest survey — report that a tablet with Windows capability would likely lead to more work-related usage.
Other Key Findings
About half of nonowners in the U.S. say that they intend to buy a tablet or an e-reader in the next year. Purchase intent is even higher elsewhere, with almost every country surveyed showing double-digit increases, with the exception of Japan, which lags in tablet ownership.
Approximately half of consumers are interested in purchasing a tablet rather than a netbook. A third are considering a tablet over a home PC or laptop.
Between one-third and one-half of current tablet owners think it likely that their tablets will replace their PCs, laptops, netbooks, and portable media devices.
One-third of consumers are considering the purchase of an e-reader instead of a netbook or portable media device.
The willingness to pay for tablets is much higher in Europe and China than in the U.S., with optimal price ranges 50 to 95 percent higher in Europe and 90 percent higher in China.
In Europe and China, consumers are willing to pay larger increases (more than $100), while U.S. consumers expressed a willingness to accept a more modest $35 increase.
Nearly nine out of ten U.S. consumers plan to use tablets for e-mail and Web surfing.
Expectations and reality vary on video viewing. About 80 percent of U.S. respondents say that they expect to watch videos, while only 63 percent of current device owners actually do so.
Would you buy a $99 tablet computer the manufacturer says has not sacrificed performance for a low price?
MIPS Technologies and CPU Ingenic Semiconductor have introduced just such a device, the Novo7.
The new tablet runs Android’s much-touted “Ice Cream Sandwich” operating system, has a 7-inch touchscreen, a 1GHz processor, front and rear facing cameras, supports WiFi and external 3G connections.
It has connections for USB 2.0, HDMI 1.3, and a microSD slot. It even includes 3D graphics capabilities with a Vivante GC860 BPU and 1080p video decoding.
It comes with a Spiderman game installed and says its XBurst chip provides realistic graphics and fast games. It claims the battery will last six hours for games, 25 hours for music, eight hours for video and 7 for browsing web sites. It lasts up to 300 hours on standby.
Wow. If this device performs as well as claimed (we’ve asked for a demo unit), it’s likely to change the dynamics of tablet sales. It has more features than the Amazon Kindle Fire we recently bought (and still enjoy) and is the first to run the Ice Cream Sandwich operating system. At $99, we might even buy a couple as Christmas gifts if they are available and it runs as advertised.
Clicking on the buy button on the Novo7 site, however, led us to “Sorry, your item is sold out notice.”
We haven’t seen one of these yet – but here’s a video from the company showing it off:
The growing success of tablets is leaving many to question the viability of the e-reader market’s sustainability, says market intelligence firrm In-Stat. E-readers still offer the truest reading experience and appeal most to avid readers, but a broader market of consumers are demanding multimedia functionality, like web browsing, video and gaming, in their next mobile device.
Tablets, like the Apple iPad, are optimized to deliver this kind of multifunction experience, and therefore, represent a stronger opportunity for suppliers and manufacturers alike. As a result, In-Stat (www.in-stat.com) is forecasting that tablet shipments will outpace e-reader shipments by the end of this year.
“Of the two, the tablet market is the stronger and more sustainable opportunity,” says Stephanie Ethier, Senior Analyst. “In fact, e-reader manufacturers will soon begin adding tablet-like devices to their lineups in order to take advantage of the tablet frenzy. Barnes & Noble already offers the Color Nook, which is often compared to a tablet, and Amazon, the leader in the e-reader space with its Kindle, will likely launch a tablet device later this year in an effort to compete head-to-head with the iPad.”
At TechJournal South we have tested the Xoom tablet and use a Kindle. While we understand the general users desire for more functions on a tablet-like device, those added features can come with drawbacks such as added weight, screens hard to read in the sunlight, and decreased battery life.
Personally, we prefer a dedicated e-reader, although we suspect we’ll end up with both the light, easy-to-carry Kindle-like readers and a more tablet-like device eventually. The key for us would be a device that uses an E-ink technology like the Kindle’s rather than a backlit LED screen for just reading. Also, a non-reflective screen is essential. It does seem like a good idea right now to wait until the more advanced units hit the market.
Additional market and survey data findings include:
Of the 1,000 US respondents to In-Stat’s latest end-user survey, 38% own a tablet as compared to the 26% who own an e-reader.
Fueled by low prices and continued expansion of e-book content, global e-reader shipments will reach 40 million by 2015.
Tablet shipments will outpace e-reader shipments.
The total semiconductor opportunity for tablet suppliers will reach $13.8 billion in 2015.
The total semiconductor opportunity for e-reader suppliers will reach $1.6 billion in 2015.
Over 60% of future tablet purchasers plan to buy a tablet equipped with both Wi-Fi and 3G connectivity.
By 2015, 15% of all tablet shipments will go into business markets.
Apple has again met expectations and upped the ante with the added features in place for the new iPad.
Annual revenues from consumer mobile applications will approach $52 billion by 2016 as consumer smartphone adoption accelerates in tandem with the emergence of a mass tablet market, according to A new 
Consumers are driving segmentation of the fast-growing tablet market away from one-size-fits-all models toward different devices for distinct purposes, according to a new survey of 8,700 consumers in the eight top markets worldwide.
Would you buy a $99 tablet computer the manufacturer says has not sacrificed performance for a low price?
The growing success of tablets is leaving many to question the viability of the e-reader market’s sustainability, says market intelligence firrm 
