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Are tablets at crisis in China?

Jennifer Matsui

Associate Director for Innovation and Product Development

Digital 05.06.2015 / 09:42

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Tablets sales in China are expected to keep growing, but how well do they serve the digital needs of Chinese consumers?

Only a few years ago, tablets were being hailed as the next big thing in technology, the revolutionary device that would put the final nail in the coffin for more 'archaic' solutions like laptops and desktops. And to be sure, tablets blazed an impressive trail. Led by Apple's iPad, which sold 15 million units in its first year of release of 2010, the global tablet market surpassed 200 million shipments in 2013.

But the buzz around tablets has taken a negative turn of late. Global sales are in decline, falling off by an estimated 9.7% in the second quarter of this year according to IDC. Even Apple is not immune. Year on year iPad sales have dropped significantly in the past two quarters - by 3.1 million units in Q2 alone.

News reports point to a variety of factors contributing to such declines. With their higher price points, tablets are not considered as 'disposable' as smartphones - and the new models being released are not giving consumers enough incentive to upgrade, leading to longer purchase cycles. The emergence of phablets has also put a strain on tablets. Consumers are reconsidering whether they need both a smartphone and tablet when phablets can give them the functionality of both in a single device. But most critical is that many consumers see tablets as a 'nice to have' device as opposed to a 'must have'. Tablets do not serve a clear purpose in the minds of consumers - so as other options have come along that are better suited to fulfilling their digital needs; consumers have been choosing those options at the expense of tablets.

Even so, the downward trajectory on tablets does not appear to have reached China - yet. IDC is forecasting a nearly 10% increase in units sold this year in the mainland, which seems to indicate a healthy market. But is the tablet market in China really immune in the long run to the same pressures leading to the global decline? World of Convergence, TNS China's recent in-depth investigation into the digital needs of Chinese consumers, can help assess whether the China tablet market is also at risk.

At first glance, some signals point to tablets being a stable fixture in China's digital landscape. A majority of tablet users have been spending more time on their tablet over the past year, using them increasingly for activities like making bookings and managing their finances. But even so, four years on from the introduction of the first iPad, tablets still make up only a very small share of the time consumers devote to their digital activities. For the most part, Chinese consumers have been turning to their smartphones to accomplish their digital jobs to be done, and using laptops or desktops to fill in the gaps. Tablets have not yet managed to put a strong stake in the ground.

The low share of time devoted to tablets points to the underlying issue of this device - how well do they really serve the digital needs of Chinese consumers?  The answer to this question paints a bleak picture for the future of tablets in China.

When it comes to digital, Chinese consumers have a handful of fundamental needs they expect devices to deliver regardless of the situation - things like high security, long battery life, and uncompromised connectivity. While none of these requirements are particularly surprising or groundbreaking, they are nevertheless critical because they are relevant to all interactions consumers have with their digital devices. Falling short on these requirements puts a device at risk - and tablets do indeed fall short. Consumers find them particularly disappointing in delivering guaranteed protection of personal information and reliable connectivity.

Even more daunting is that there is really no distinct digital need space that tablets 'own.' World of Convergence has identified 10 distinct occasion needs, which define consumers' ideal requirements for delivery by digital solutions - and in none of these areas do tablets emerge as the leader. For nearly every digital need, including connecting with others, capturing images, and even supporting health and well-being, consumers regard smartphones as a better choice than tablets.

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And the devices which tablets were expected to drive to obsolescence - laptops and desktops? Consumers actually look at them as far superior choices to tablets in three need spaces, for seamless multi-tasking, highly versatile productivity, and getting things done simply and securely. While these devices certainly have their own issues to contend with, they at least serve a clear purpose in the minds of consumers - something tablets can not claim to do.

A device doesn't necessarily have to be everything to everyone to be a success. But the problem is that tablets are notthething foranything. As in the rest of the worth, Chinese consumers regard them as 'nice to have' devices, not 'must have' - and this signals tough times ahead in China too. Unless the next generation of tablets is more focused on mitigating the tensions consumers are currently experiencing with tablets and aligning them more clearly with specific consumer needs, tablets are likely headed down the path to obsolescence.

Source: Kantar TNS

Editor's notes

* To reach the author, or to know more information, data and analysis of opportunities in China's digital market or the research World of Convergence, please contact us.

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