The India Tablets market recorded a growth of 13%* (4.1Mn) in terms of unit shipments in FY 2014, over FY 2013. The growth was much lower than anticipated industry-wide just a couple of years ago. Tablet as a product category has matured and undergone a lot of incremental changes in the past three years, since it was launched in India during 4Q CY 2010. From a once fast-growing, fiercely competitive market category in India, adoption amongst consumers struck a plateau over the last year or so. This may be attributed to the soaring popularity of the 'phablet' form factor, continuously changing usage patterns of consumers in India discovering new apps, as well the implications of the complex BIS certification process for the category where refresh cycles are in months, rather than years.
There was a time when almost every IT vendor was planning or introducing their Tablet models in the country. Most of these vendors came from a background of either Mobile Handset business or IT product distribution. 'Time travel' to the 1Q CY 2014 and less than ten smartphone vendors out of approx. 50 smartphone vendors have an offering in the Tablets space. This shows the consolidation that the India Tablets market has seen in recent quarters; all the players who launched a Tablet form factor could not generate sufficient sales to sustain operations. Going forward, only serious players with a long term vision of the market are likely to remain committed to this category of devices. This becomes even more evident if we look at the latest market standings for 1Q CY 2014, where Tier-I vendors like Samsung and Apple are among the Top 3 players in the Tablets space in terms of unit shipments.
However, there is a silver lining to the India Tablets story - the device is gaining significant traction in the Enterprise segment with adoption among industry verticals like BFSI, Education, Healthcare, Manufacturing, Retail, Postal & Courier Services and Market Research showing an upward trend. Enterprise segment Tablet sales contributed to almost 22% of total shipments in India in the last quarter of FY 2014*. We expect global players focused on high growth verticals and local, niche players building on use cases in the Enterprise segments and wooing the and SMB segment with 'value for money' at the same time offerings. Innovative Tablet form factors, with locally relevant content would also be targeted at the consumer segment to increase adoption rates. There are also reports about the BIS certification process moving online, which will reduce time-to-market for vendors.
Hence, it will be too early to write a final obituary for the Tablets category of devices especially when we are going to see some LTE-enabled, business case focused Tablets make their way into the India market by end-2014. It will be also interesting to watch how the 7-inch Tablet PC market, which currently contributes close to 80% of total shipments, will emerge from the expected stiff face-off from Phablets. As far as technological trends are concerned, 3G-capable Tablets and Voice-enabled Tablets will continue to grow, due to growing data consumption amongst telecom subscribers to access social media networks, IM accounts, play online games, keep up with corporate and personal mail or simply browse the web for information on the go. On the operating system front Android will remain the dominant OS, though it is expected to lose some share to the Windows and iOS platforms, which will be preferred in certain industry verticals like Banking and Healthcare.
*Source:CMR India Quarterly Tablet Market Tracker 1Q 2014