Tablets set for slow growth in India

03 June 2011

NEW DELHI: Tablet manufacturers like Acer, Dell and Samsung must overcome several obstacles to drive category growth in India.

Electronics group Acer recently rolled out its Iconia Tab A500 in India, but does not believe the sector will gain rapid traction during the near future.

"Tablets are highly-priced and have got acceptance only in developed countries," S Rajendran, chief marketing officer, Acer India, told the Business Standard.

"In India, IT penetration is quite low and people in many parts of the country are still new to computing, which is why tablets are yet to make a mark."

"So, they prefer desktops as their first computing device."

Samsung currently sells appliances carrying eight-inch and ten-inch screens in the Asian nation, with prices standing at between 28,000 rupees and 35,000 rupees.

"Even though the tablet PC market today stands at around 25,000 units a quarter, we expect it to grow exponentially here on," said Ranjit Yadav, country head, Samsung Mobile and IT.

Dell has also launched the Streak in India, and anticipates this gadget might considerably lag, rather than cannibalising, computer sales.

"I have not seen any projection about tablets having any visible impact on PC sales in India," said Amit Midha, head of Dell's operations across China and South Asia.

"Desktops and laptops will continue to grow in the Indian market at least for the next three-to-four years."

More broadly, Midha suggested smartphones may actually have better short term prospects than the variety of slates on offer.

HCL Infosystems introduced one of India's first locally-made tablets in 2011, and predicts substantial challenges await the sector before it reaches a critical mass.

"If you look at the tablet market in this country, nothing happened. The tablet category does not exist," said Ajai Chowdhry, chairman, HCL Infosystems.

"Abroad, tablets work for specific reasons. The iPad is application driven. The apps that were originally created for the iPhone were ported to a larger screen device."

"Suddenly they had one million applications available when they launched the iPad. Now how do you make that happen in this country?"

Alongside issues of cost, the lack of a comprehensive WiFi infrastructure and popular concerns regarding the potential expense from using 3G networks constitute significant barriers.

"We know that in the next six to seven months, when 3G becomes more prevalent all over the country, the tablet category would then become relevant," Chowdhry said.

Vishal Tripathi, principal research analyst at insights provider Gartner, stated businesses have proved more enthusiastic about this new generation of gadgets than the public.

"When the tablet PC arrived in India, people thought the consumer segment will buy it, which is not the case," Tripathi said.

"The buying is happening in the enterprise segment, both because of affordability and utility ... In the price range of $500-800, tablets are a little expensive for the Indian market."

Another contributor to limited uptake levels thus far is the low rate of computer penetration, meaning the Indian landscape has a very different shape than areas like the US and Western Europe.

"There is not much utility-based need of tablets in India, because of which people prefer desktops. In developed markets, people buy a tablet as their second or third device," Tripathi said.

Data sourced from Business Standard; additional content by Warc staff