Small tablets loom large in holiday sales forecast
By Kari Jensen
December 9, 2013
What is up next for mobile?
Small dominates large in tablet sales moving into the holidays, according to analysts.
Size and price matter to holiday and year-end bargain shoppers, according to analysts. Regardless, tablets of any price will be included on many consumer's wish lists.
"Tablets are one of the hottest computing products out there right now and we expect them to remain popular throughout the U.S. holiday season," said Neil Mawston, London-based executive director at Strategy Analytics. "Tablets make good seasonal gifts because they can be used by everyone from children to adults to seniors.
"The 7-to-9-inch 'compact' tablet category, such as the Google Nexus 7, is the hottest market at the moment," he said. "Mass-market users are keen to buy new computing devices at affordable price-points."
Tablets showed the fastest growth in ownership among all mobile devices, increasing 48 percent since 2012, according to a new report by Deloitte (see story).
New, smaller tablets are likely to make an impact this holiday season include the iPad mini with Retina display, Amazon's Kindle Fire HDX, Samsung's Galaxy Tab 3 and Samsung's Galaxy Note 8.
Other smaller tablets available include Google Nexus 7, Barnes & Noble Nook HD and EvgaTegra Note 7.
Despite the increase of devices on the market, Apple still dominates, the analysts said.
"Apple is performing well in terms of product quality, design and software," Mr. Mawston said. "Its app store, hardware styling and usability remain best-in-class.
"Apple is losing pace on pricing," he said. "A flood of cheaper Android tablets, with acceptable levels of quality for most consumers, is causing pain for Apple because there has developed a race to the bottom on pricing.
"Samsung is the main threat to Apple's iPad today. Samsung has strong products and extensive distribution channels that enable it to reach lots of global customers with decent products. Amazon, Asus and Acer are also threats to Apple in 2014 because they want to compete aggressively with the iPad portfolio on price."
Apple's share of the market is about 40 percent now, down from 50 percent a year ago.
To some, that may look as if Apple is losing ground, said Carl Howe, vice president of research at Yankee Group, Boston, MA. "If you view it as a percentage of units shipped, that's true."
"What's unspoken in that percentage is, 'What is the size of the market?'" he said. "Apple sells more tablets today than they did a year ago. [Yet] the market [also] is bigger.
"If you talk about how many people own Apple devices the number continues to go up and up," Mr. Howe said. "If you talk about the percentage of Apple [tablets] sold, that number goes down."
Sound consumer buys
The key in buying is to determine "What do consumers own" versus "What do consumers intend to buy."
Forty-four percent of users own Apple iPads, while 12 percent own Amazon Kindle Fires, 10 percent own Samsung tablets and the remainder own anything else, according to Mr. Howe.
As for intent to buy, 32 percent of users said they plan to purchase an Apple iPad. Twenty-three percent said they didn't know what they were going to buy; 8.5 percent planned to buy an Amazon tablet, and 7.7 percent intend to purchase a Samsung.
Samsung Galaxy Tab 3 7.0
Small tablets, those with seven-inch diagonal screens or smaller, tend to cost less than larger tablets.
Up to 2012, tablets with screens 10-inch diagonal to 12-inch diagonal were common.
Apple released the iPad mini in November 2012. Apple was somewhat later in the trend. It appeared that Apple's iPad mini was in response to Android seven-inch diagonal screen size tablets selling well.
"When the largest tablet seller follows that trend, the biggest question at end of last year was, 'What impact will the iPad mini have on the market?'" said Jeff Orr, Bend, Oregon-based senior practice director at ABI Research. "'Will it impact Apple's sales or overall sales of tablets?' "
It actually ended up impacting Apple's sales more so than the market's sales, as the iPad mini outpaced the iPad, he said.
Analysts noticed the increase in the small tablet market mid-year, he said.
"What it means to consumers is there are more devices available and also devices will be more affordable," Mr. Orr said. "We've seen coming out of Black Friday and Cyber Monday that the tablet trend is moving toward more affordable solutions."
As the tablet technology market matures, more styles, features and functions become available. Some tablets have specialized features geared toward users' interests or ages.
Others cater to cooks, chefs or outdoor enthusiasts. Others are geared toward students and educators, such as Fourier Education's einstein Tablet+ or Nexus 7 with Google Play for Education.
There is a tablet for every user, and that should make marketers happy.
"Tablet marketers should have an easy ride this holiday season because new models are flying off the shelves," Mr. Mawston said. "Marketers from other industries will also be paying greater attention to tablets. For example, more shopping at Amazon is being done online via tablets than ever before."
Kari Jensen is staff writer on Mobile Marketer, New York
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