The rapid rise of the tablet

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With the arrival of Windows 8, tablets are shaping up as a future home hub and business tool. Ian Calcutt reports.

The tablet computer sector is quick-growing and fast-changing. It is one of the key categories in consumer electronics showing increased sales in the last year. The product line-up is evolving too.

Market analyst Elena Prykhodko at Futuresource Consulting reports that: “The tablet market over-performed expectations by over 15% in 2011 reaching 63.4 million shipments and continued its meteoric ascent in 2012. In the first half of this year the tablet market grew 125% reaching 44 million units shipped compared with the same period in 2011. Futuresource estimates that the market will reach approximately 124 million in the full year 2012. Reflecting the fast tablet uptake, Futuresource currently expects the global market to grow almost three-fold to reach 336m units in 2016.”

The spring saw the arrival of the third generation iPad from the market-leader Apple, which doubled the resolution of the screen and the power of its graphics processor, while keeping battery life up at around 10 hours.

“Apple’s share declined in the course of 2010-11,” says Prykhodko, “but the company has been gaining it back in the course of Q1 and Q2 2012, benefiting from the price reduction on the second generation iPad, the continued appeal of iPad as a ‘hot product’ and Apple’s marketing might.”

In July, Google launched its 7in Galaxy Nexus 7 tablet, manufactured by Asus and running the newest (v4.1) version of the Android operating system (OS). With its decent spec but subsidised low price of $199/£159, it was an instant hit and sold out its initial production run.

Another Android supporter, Archos, released its slimline Gen10 XS series in 10.1, 9.7 and 8-inch sizes. The tablets are aimed at multimedia consumers for a competitive price of £300 for the largest model, including a combined detachable cover/keyboard.

Sony refreshed its tablet range by adopting the Xperia branding from its mobile phones. As with Sony’s previous products, the Xperia Tablet S uses Android. Meanwhile, Samsung announced new tablets at IFA 2012, including its 10.1in Ativ Tab that features Windows RT, a variation of the latest Windows 8 OS.

Computer specialists such as Dell, Lenovo and HP are also pinning hopes on Windows 8 tablets and the creator of Windows, Microsoft, is joining the fray with its own-branded 10.6in tablets, launching in Q4 2012 under the name Surface.

Windows 8 tablets from Microsoft and other vendors will use one of two OS variations. Windows RT is repurposed for running on Nvidia’s ARM processors, while the higher-end Windows 8 Pro will run on tablets powered by new Intel chips.

The Surface tablets are not expected to undercut their rivals in price, instead concentrating on the benefits of the Windows environment, which is particularly useful to business users, and bundling in accessories such as a cover that doubles as a removable keyboard.

“Microsoft is likely to garner success in the enterprise segment with the upcoming Windows 8 Pro device,” explains Prykhodko. “The success of ARM-based Windows RT tablets in the consumer market largely depends on price, particularly as it will likely take a year or two for a critical mass of useful and appealing apps to be developed for it.”

On top of all that, Apple is widely expected to roll out a smaller 7.85in version of the iPad before this year is out, though this was yet to be confirmed at the time of writing.

Extra entertainment

As the choice of tablet devices increases, so do their uses. The larger, circa-10in models are often used around the home, for ‘infotainment’, mixing web browsing, email and social media interactions with game playing and online video such as YouTube or iPlayer.

Tablets and their smartphone counterparts, are increasingly being used like a second TV or a companion device that adds content or functionality to the main screen’s channels. Sky, Virgin Media, YouView, Harvard’s View21 and Freesat each have or plan to release apps to access video or control set-top boxes on tablets. The Sky Sports app, for example, enables deeper coverage of golf, football and F1, and includes split-screen live feeds.

“A recent update to our Sky+ app lets customers use Sky+ on iPad to change channels on their set-top box, or even edit what’s on their Sky+ planner, simply by connecting to the same network as their Sky+HD box,” a Sky spokesperson told IER.

“Our apps are available across multiple platforms and have been downloaded in total over 60 million times, with Sky+, Sky Sports and Sky Go all proving extremely popular with customers. Four million customers have now downloaded Sky Go and we are really pleased with its success across platforms, with evidence of customers clearly appreciating the flexibility of both watching content on the move, plus in the home as an additional screen.”

Luke Noonan, purchasing director for Disgo, believes that “the second screen is just one small part of how it will interact with your devices. What we have found at Disgo is that a tablet is a great device to have in busy households to watch films, surf the net or do schoolwork with. Sales of PCs have declined as people buy more tablets, and households are now buying tablets rather than a second PC. This is more about the tablet being a hub for the home, where you can control all your electrical devices from one central point. Home automation is still in the embryonic stage but it is developing tablets that are at the forefront of this.”

Changing trends

The iPad’s dominance has prompted other manufacturers to explore alternatives, such as the increasingly popular 7in category, which inevitably sells for a cheaper price and is a more portable option.

Elena Prykhodko at Futuresource says: “The key appeal for smaller tablets is their low price with the ‘sweet spot’ between $100-200 [£60-120], driving mass market adoption in consumer and education segments, particularly in emerging countries, and making them an impulse purchase in the developed markets.”

Disgo’s Luke Noonan adds, “Apple’s iPad has certainly created an opportunity to bring alternative tablets to retail. Apple’s share is huge and it has maintained about 75% over the last three years. However, the growth in the market for tablets has meant ample opportunities for companies such as Disgo to take a slice of a significant pie. This is especially apparent at the lower end of the market where products do not really have to compete with Apple. Many consumers want the functionality of an iPad but are unable to justify the cost, this helped us develop the 9104 [tablet model] and will further influence future products.”

It is surprising that the Android operating system, which has a higher market share in the smartphone sector than Apple’s iOS for iPhone, has not yet established a strong position in the larger tablet category.

“The advances we have seen with Android have been phenomenal and Android 4 has for the first time put pressure on iOS,” says Noonan. “Windows is likely to be more orientated towards the business sector, however, Microsoft will probably benefit from the fallout of the recent US [court] case between Apple and Samsung. Samsung was the material loser but this will ultimately be a big blow to Google. Overall, brand doesn’t really play much of a part in the purchase decision, unless you are Apple. With Android it is more about the specs of the product that ultimately provides the user with the best experience.”

According to Adrian Horne, global communications manager for Mobile Internet and Digital Home at Lenovo UK, “Operating system choice may become more important as Windows 8
becomes available and more devices with greater functionality and flexibility come to market.”

Horne adds, “The [tablet] market is approaching a 50/50 split between iOS and other operating systems, showing clear opportunities for Android and Windows 8 in particular. For a business focused system and also for some consumers the familiarity of a Windows operating system will give them more confidence to introduce or move to a new form factor. The possible compatibility of existing applications will also help users.”

Another shift is the deployment of tablets in everyday environments for public information, including shops and hospitals, or for in-flight entertainment. Workplace adoption of tablets is part of a growing movement too.

“Over the last 18 months, many business customers have been seeing increased requests for employees to use their own tablet devices in a business environment,” explains Horne. “There is clearly a demand in this space, and offering a tablet device that offers the users the tablet experience they need and expect while delivering a secure device that is easy to manage and integrate into a corporate environment, and give peace of mind to IT management.”

Non-Windows products can also benefit from the BYOD (bring your own device) trend. “Tablets are being used more and more for work applications and productivity, adds Luke Noonan from Disgo. “It used to be ‘the laptop to do and the tablet to view,’ but not anymore.”

Set up shop

Futuresource Consulting’s Elena Prykhodko explains how retailers can prepare for a future dominated by tablet devices.

Our extensive discussions with retailers clearly indicate that they are thinking hard how best to demonstrate interaction between devices such as tablets and TVs. Most believe that we will see a growing trend towards more ‘shop-in-shop’ areas (dedicated areas within a store where one brand’s product ecosystem is demonstrated). Retailers are increasingly being asked by vendors to explore shop-in-shop solutions. The challenge for the retailer is that how best to position these areas within store to maximise footfall potential while maintaining adequate floor space for its other suppliers.

In addition, selected retailers are likely to have their own video streaming service (e.g. the Dixons Knowhow movie service) available on connected devices; therefore it is in their interest to demonstrate how the service can be accessed and controlled.

Not surprisingly, high-end independent retailers and vendor own-shops (eg Bang & Olufsen, Bose) are ahead of the curve in demonstrating functionality/flexibility that can be offered by using tablets and smartphones. In addition, for many of them some groundwork still needs to be done to enable fast broadband access on the shop floor. 

Tablets – including iPad – and smartphones will increasingly be used to as remote controls for home CE products, being particularly relevant for audio products. However, in the short run, it is not very likely that any vendor (except Apple) would launch a TV, Blu-ray disc player or audio device that cannot be operated without a tablet.

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