This is in continuation to a series of infographics on the Tablet globally, the Indian perspectives and the device use cases proposition. This post examines the use cases for tablets – the segmentation of consumers and the difference between a WiFi tablet usage and a Network tablet use cases.
Please leave me your comments and suggestions.
In the course of the last decade Yahoo! has lost out on every major initiative whether be Yahoo profiles and chat (To Facebook) or Search (to Bing) or Flickr (To Instagram). Once the most important Internet company, Yahoo! has been reduced to a state of profitable (shrinking fast) irrelevance. There was no major stake on how Yahoo! could influence Internet browsing behavior or leverage search or take a stake in the mobile bandwagon. Therefore Yahoo! Axis a refreshing new initiative from an almost dinosaur internet company. Axis essentially is a browser for iOS devices and a browser plugin for desktop computers. It has a premise and the intent is in the right direction.
Interestingly now, Axis will help Yahoo! skip trying to compete with the dominant desktop browsers and instead offer a plug-in that works on all of them. That enables Axis users to extend their browsing habits to the Axis apps for iPad and iPhone, which is much less settled territory. Mobile and tablet browsing is the next frontier, and Yahoo is wise to focus the next stage of its business there.
- It essentially seeks to integrate the browsing and search experience. Users will not be required to launch a new page. Both the experiences are well knit on a single page with the usual bells and whistles. Why waste time on the search engine when the search process is built into the browser. Axis does away with the blue links that have defined internet query results for a decade and replaced them with previews of pages that might provide the information being sought.
- Understandably the experience is touch led – which is a key to the mobility, smartphone and tablet platform. Finally then, Yahoo! has some ground on hand held devices with the Axis app.
- Also key is the seamlessness of the experience which can be shared across all iOS devices. It would be interesting to see how Yahoo! recreates the iOS type experience across a range of disparate platforms each not exactly talking to the other. Possibly the plug-in would do the trick… but experience is the key here.
- On the flip however, Axis is somewhat of a double edged sword because it by-passes the search results page. Yahoo still makes a quarter of its revenues from the sponsored links on this page.
However, Yahoo! is betting its future on the convenience and speed of this search concept. The seamlessness of the experience is the consumer hook. What keeps them there is the way Axis syncs browsing history between the desktop and mobile versions, so users can switch back and forth easily between devices. Once there is enough data on the users, Yahoo can sell you all its services by promoting them heavily in the app and its search results.
Of late Yahoo! has lurched from one crisis to another. It still makes money but the future is very uncertain given the mobile dominance building on the internet, advent of Facebook and Google. Axis is thus a step in the right direction. Yahoo! still wants to take one more fight..
Tablets are one of the fastest technology devices in terms of reaching threshold adoption volumes even though the number is miniscule in Indian perspective. The infographic below examines the tablet from a convergence viewshot and examines the niche that it has created as a media consumption device. Furthermore, its also analyses how the tablet features dictate the marketing proposition – whether be media tabs, gaming tabs or tabs as a mobility device (mostly used for enterprises).
Do leave your comments on how useful you find this information and suggestions to make it better.Cheers!
Even when the base price for 2G is being debated and the 3G tariffs are registering a free fall, 4G services are supposed to be taking over as the revenue engines for Telcos riding on the data wave. However, a recent research report from PWC states that it is highly unlikely that data use revenues will grow from the current level of around 14 per cent of total revenue to 50 per cent by 2020.
TRAI, while figuring out per unit 4G spectrum rates, had assumed that data services will contribute more than half of an operators’ revenues by 2020. Analysts and industry operators are now arguing that this basis of pricing spectrum is wrong. At present, non-voice revenues as a percentage of total revenues stand at 14 per cent, out of which pure data services contribute only 5 per cent and the rest comes from message-based services.
PWC has a sound basis- Even in mature telecom markets such as Denmark, Italy and the US, the contribution of data services to revenue is only 19.6 per cent, 27.2 per cent and 33.20 per cent, respectively in 2010. In fact, not even Japan has 50 per cent data revenues as a proportion of total revenues today.
Sometime this week, Mukesh Ambani put off the launch of RCom 4G services by an year. Even while Airtel has been quick to launch 4G, for all purposes this is a soft launch. RCom entry has been deferred because the markets are not matured yet. Lack of demand may also see two foreign operators — Augere Wireless (backed by France Telecom) and US chipmaker Qualcomm — quit the 4G data segment.
So now the question that begs to be answered is given sluggish market maturity, lack of demand – and the fact that most mature telecom markets havent performed at 50% revenue contribution levels, was the industry APEX body – TRAI over setting its targets and the spectrum pricing? For those who invested in, the case of a break even seems a little distant already.
With 475K units shipped into India in 2011, the Tablet category is still small when compared to Laptops or Smartphones (~9 million p.a). However there is traction, there is space, ergo there is huge growth. The following infographic tries to capture the growth perspective of the infant tablet devices category in India – from 2010 to 2017.
Worldwide sales of mobile phones to end users reached 419.1 million units in the first quarter of 2012, a 2 per cent decline from the first quarter of 2011, according to Gartner, Inc. This is the first time since the second quarter of 2009 that the market exhibited a decline. The slow down in the first quarter was attributed to a low demand in Asia Pacific in view of generally less exciting product launches.
Samsung became the world’s top mobile handset vendor during the quarter, displacing Nokia which had held the No. 1 spot since 1998. Samsung took back the world’s No. 1 smartphone position from Apple, selling 38 million smartphones worldwide. In addition, Samsung’s Android-based smartphone sales in the first quarter of 2012 represented more than 40 percent of Android-based smartphone sales worldwide; no other vendors achieved more than a 10 percent share of the market.
Sales of smartphones continued to drive mobile device market growth, reaching 144.4 million units in the first quarter of 2012, up 44.7 percent year-over-year. This quarter also saw the top two smartphone vendors, Apple and Samsung, raising their combined share to 49.3 percent, up from 29.3 percent in the first quarter of 2011, and widening their lead over Nokia – which saw its smartphone market share drop to 9.2 percent. Nokia’s mobile handset sales reached 83.2 million units, a 22.7 percent decrease from the first quarter of 2011.
Android accounted for more than half of all smartphone sales (56.1 percent) in the first quarter of 2012. A very strong commoditization trend is setting in on the smartphone segment especially the ones based on Android OS. At the high end, hardware features coupled with applications and services are helping differentiation, but this is restricted to major players with intellectual property assets. However, in the mid to low-end segment, price is increasingly becoming the sole differentiator. This will only worsen with the entry of new players and the dominance of Chinese manufacturers, leading to increased competition, low profitability and scattered market share
The mobile phone market shares over the last 13 quarters are plotted above. Interestingly, even while the market has grown in the last 13 quarters by 55% from 269.1 mln units in Q1 2009 to the present volumes, what explains Nokia’s loss in not an other incumbent but the rise of the “Others” category. One would associate Micromax, Karbonn, Spice, Lava and other local white labelled brands in this space. The irony is back in 2008, when Nokia was at its zenith, this threat was widely rubished by most of the high ups in Nokia as a passing fad.
Are tablets better news for advertisers and retailers than smartphones?
A recent report by Adobe – Adobe Digital Index report lauds tablets to be the bigger in terms of mobile marketing impact stating that One tablet generates as many website visits as four smartphones. By the end of Q1 2012 smartphones accounted for 6.1% of site visits compared to 4.3% on tablet.However, smartphones only maintain a greater share of website visits due to the lower penetration rate of tablets. From 2010 through to 2011 there were 5.3 times more smartphones shipped across North America and Western Europe compared to tablets. Adobe predicts if this trend continues then tablets will account for more than 10% of website visits in 2014 and that at its current rate of growth tablet traffic will surpass smartphone traffic within 12 months.
This highlights the fact that e-tailers need to have a tablet strategy in place.
When compared to laptops, tablets pale by a shade as laptops which ship 6X times tablets, contribute 19X website visits as compared to tablets. The reasons are fairly obvious as people still spend longer hours on their laptops compared to tablets – a lacuna that tablets as a segment would be addressing in times to come. Interestingly, there seems to be a bias in the kind of websites accessed from Tablets versus those that are accessed a Laptop.
Tablets and PCs to be nearly interchangeable for media consumption and for repeated interactions with financial service providers. This suggests that consumers consider tablets to be similar to PCs for visits that are repeated, routine, involve passive consumption of content, and so on. However, PC conversion rates are much higher than tablet for retail and travel sites, suggesting that consumers prefer PCs for visits involving research, comparison of alternatives, and online purchasing.
According to Gartner, the Tablet segment sales are going to increase from 68 million units in 2011 to 118 million units in 2012 registering a 98% increase in volumes. 2011 saw tablet shipments multiply by 3.5X over 2010. Furthermore, the segment will see growth at 60%+ CAGR for the next 5 years and gartner expects that the total number of tablet users will be in excess of 660 million by 2016.
Apple will be the key player and influencer in the segment, even while Amazon, Android and Windows build base and shall continue its leadership position well in 2015 albeit more smaller margins.
Presenting my first infographic build to emphasize the promise in the Tablet devices segment.
iPad has been the the force-majuere in the Tablet segment and has held strong against the multiple Androids and a one -off RIM Playbook as well. However in Q4, 2011, it was Amazon Kindle Fire Tablet launched the most credible counter offensive to Apple iPad monopoly. Not only did Amazon Kindle Fire impact Android numbers positively by selling 4.8 million units in the holiday season, but it has caused a pause and re-think in Apple on the feasibility of low cost 7″ Tablets. There are rumours about a 7″ iPad from Apple now.
Now then, does Apple really require a 7″ iPad?
Reasons in favour
1. Apple may have burnt its hands and gone on the path of bankruptcy by not choosing to go with the cheaper computer in the early 80s. So there is meat in the arguement that no segment be left out. A stripped down iPad could fire up sales at low margins for Apple.
2. Apple could also block Android more effectively in Tablets – one of the hottest device domains in the future.
3. Apple could also increase its user base and graduate more users too its unmatched content eco-system and hope to make more gross money out of it.
But on the other hand
1. Does Apple needs volumes? Its exclusivity has been its USP and its profit/revenue/earnings per unit has been the stand out even as Google/Android have generally failed in terms of moentizing their services effectively.
Apple has also historically avoided playing the volume game, preferring instead to have a niche market following while cornering most of the industry profits. Even in the mobile phone business, where its iPhones are selling like hotcakes, its global market share is in single digits but it takes up more than three-fourths of the industry’s profits because of its high margins.
2. The Tablet market is far from mature and a carefully positioned mid end ($300?) 9.7″ earlier generation iPad2 could possibly be a better solution not only in terms of bocking Amazon and Android but also gathering volumes. Carriers would give their left arm, right arm and more for a data machine like the iPad on reduced prices in their network.
This strategy could meet the demand for the low-cost tablets to a good extent without having to develop a smaller tablet.
3. A cheaper 7-inch tablet appeals to a different segment of population that includes mostly price-conscious consumers. The entry of the Kindle Fire has lowered the cost barrier and will pave the way for new consumers entering the tablet market. This will serve to whet consumer appetite for tablets and may even make customers shift to a costlier tablet such as the iPad for their future purchases.
4. Finally then, the iPad with its 9.7″ screen defined the Media tablet space – a tablet which is broadly based on media usage which is in concurrence with Apple’s long term strategy around media – photos, songs, videos, books. Its widespread adoption led to trends such as BYOD enterprise use.
Essentially, the iPad was first a media machine and secondly a mobility device. That is the way Steve Jobs defined the tablets: he ranted the 7″ tabs were dead on arrival.
This size is useless unless you include sandpaper so users can sand their fingers down to a quarter of their size. Users have no need for a pocket sized tablet when they already have a smartphone. – Jobs
Considering the 7 factors listed above, i do think that a 7″ iPad doesnot cut ice for Apple . A low cost 9.7″ iPad (still at a premium from the market) is better. But for the record, i will go wth the late Steve Jobs - Mobility is for smartphones. Tablets are a different breed….
Interestingly a tweet that caught my eye even while i was publishing this post, needs a mention here… Amazon prepping a 10″ iPad equivalent. Interesting but, largely predictable