"We were very bullish about this category and thought it would be an addition to a business phone or laptop. But it's not taken off," says a disappointed Nilesh Gupta, managing partner, Vijay Sales. Gupta is not the only one who expected tablet PCs aka tablets to take the Indian market by storm.
It seemed likely considering they worked their magic elsewhere. A Gartner report in September last year estimated total global tablet sales at 63.6 million for 2011 and 326.3 million units by 2015. In its last quarter, Apple sold 15.43 million iPads, a 111% increase from last year.
After over a decade or so in development and many cumbersome metamorphoses, tablets suddenly took the market by storm with the success of iPad. It made just about every electronics/computer brand bet on its own version of a tiny touchscreen powered device.
Many of these reached India, some of them via simultaneous global launches. And yet, the category's performance has been lacklustre. Depending on who you ask the total sales hover between 150,000 and 180,000 units in India; everyone is in agreement the number is well below 200,000.
The most obvious obstacle is price. Apart from aberrations like the ultra low budget Aakash tablet (Rs 2,999 for the Ubislate 7+), most products start at a little over Rs 15,000 and go up to near Rs 45,000. Some of today's budget tablets were launched at twice the price just a little over six months ago.
The BlackBerry PlayBook offered a massive 50% discount towards the end of 2011. While initially advertised as a week long scheme, the price cut was still in effect at the time of going to print. PlayBooks flew off the shelves and some retailers even reported shortages. Krishnadeep Baruah, director, marketing, BlackBerry, says the schemes had begun as early as Diwali when a free entry level smartphone was bundled with the PlayBook: "The tablet by itself is an indulgence. We wanted to make sure there was a good value."
With the year end gifting season looming, BlackBerry decided to fill the market with PlayBooks and halved its asking price, doing away with the free phone. The price tag on Samsung's Galaxy Tab plummeted shortly after launch. Ranjit Yadav, country head – mobile and IT, Samsung explains, "The tab came bundled with some special offers. After a couple of months, those introductory offers were taken away, and the product sold at a price which has remained more or less consistent." Even the notoriously premium Apple made its original iPad more affordable once the iPad 2 was launched.
Price has taken many back to the drawing board. The so-called magic price point is missing in action: the tag at which a purchase seems a bargain to the value conscious Indian consumer; and the sheer volume of sales ensure the marketer is happy too. Brands and retailers alike are racking their brains over this conundrum, with high manufacturing costs leaving them little room to manoeuvre.
Skewing the mix is the market leader, the iPad which calls the shots on pricing. With a relatively small price gap between the most famous product and everyone else, many potential consumers opt for it by default, according to Gupta. He believes sales will rise once manufacturers supply a 32GB 10 inch tablet with Wi-Fi and 3G at Rs 19,990.
Vishal Tripathi, principal research analyst at Gartner is even more conservative: "The price needs to be in the range of Rs 10,000 to Rs 15,000 for a 10 inch screen and connectivity via Wi-Fi, 3G and dongle." Some brands see hefty discounts as evidence of a faulty strategy. Lenovo, Motorola and now Samsung have several different options at various price points thus appealing to a broad swathe of consumers, with at least one model in the super premium bracket.
However, price is only part of the problem. The larger issue is that brands have been unable to sell the concept of tablets to the Indian consumer. It's a secondary device that sits somewhere between a notebook computer and smartphone. Giving people a reason to fork out cash, even less cash than before, is a huge ordeal.
Says Shailendra Katyal, marketing director – Lenovo, "People find it funky but are not sure what they will do with it. It's not an alternative to either PC or smartphone and more of a consumption device than a creation device. Education is the biggest challenge as people think they can do everything but find they can't. These are category issues and not brand level issues."
Many brands tried to create a splash with gimmicky launches, PlayBook was unveiled by Salman Khan and Lenovo launched its range on an air field. But the greater focus has been on hooking potential consumers: both tech savvy early adopters as well as people who are curious but not as well informed.
For the first category, what works are mentions and reviews in well regarded tech blogs and an effective social media presence. Brands hope the second category will get influenced by the first. Says Sachin Thapar, head – IT and mobile business, Sony, "Once we have first movers, we want to harness word of mouth aggressively. Hardly anyone in our friend circle owns a tablet. It's easier to familiarise people with a new product via this route."
Marketers are spending time and money training store staff, placing several unusual demands on their teams. For instance, making sure display environments have a Wi-Fi connection; something that many tablets are crippled without. Or making sure the other devices a tablet can interact with are close at hand. The ultimate objective is a demo calculated to wow a person who'd never considered the product before, to the point where it gets on the shopping list; even if the purchase is not made immediately.
Conspicuous by its absence are mass media spends, apart from Samsung and Reliance. BlackBerry's communication strategy for PlayBook involves testimonials from satisfied users; however they can only be seen on its website.
Retailers like Gupta are starting to suspect the lack of mainstream brand building is perhaps another reason for the category underperforming: "Marketing and advertising is more important here than anywhere else. You need to make people feel this is convenient, easy to use and here to stay." Experiential marketing works but only for people who walk in and have leisure enough to browse. Admits Gupta, "People are time poor. They come in, buy and leave."
Tripathi adds, "Apple has not really marketed itself. More than any other player, Samsung made people aware of the category. There are currently 20 to 25 players but tablets have not been marketed that well. Even Samsung's focus appears to have shifted to the Samsung Galaxy Note (smartphone). Efforts need to be made by other vendors, since one cannot market to 1.3 billion."
Device manufacturers have a lot to talk about on the rational impulses to go in for a tablet. BlackBerry's Baruah cites the many enterprise friendly features and the power of multitasking. Rajeev Karwal, founder & CEO, Milagrow Tab Tops, talks about how his firm's tablets are customised to various professions. Thapar points to Sony's tablet being an "ultimate convergence device", incorporating games from PlayStation, doubling up as an infrared remote control and as a media player that can stream content to TVs and other devices.
What's missing is a solid emotional reason to make what is as of now, a fairly irrational purchase. Maybe in the thick stew of social media connections and experiential branding, a good old fashioned commercial is just what the doctor ordered.