Not so fast on tablet market - IMS Research

- Thursday, March 10, 2011

Not so fast on tablet market - IMS Research

Latin America's tablet market will be slow in developing due to the devices' high costs and as yet overall undefined use, Bill Morelli, director of the mobile technologies group at IMS Research, told BNamericas.

"The tablet will have limited penetration initially, but it will improve as the costs come down," he said. For now, "you're talking about a US$400-600 or even US$800 price tag. That's an immense amount of cash, even in developed countries."

WiFi tablets are more likely to have higher uptake than those that require a mobile connection, he added, as in the latter a data plan needs to be laid in, on top of the already high purchase cost.

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According to a study from consultancy IDC, in 2010, some 100,000 tablets were purchased in Brazil alone with price tags averaging about 1,600 reais (US$960). An additional 300,000 are expected to be picked up this year in Latin America's largest country.

The tablets "do have a play in Latin America, but it will be like the current smartphone market; you will have a relatively small group of people that use them," Morelli said. "The entry level smartphone is really going to address that need for the masses."

But the main difference between tablets and smartphones for the everyday user is the size, he added. "If a device sits in your pocket and it can access the web, you have a good business case for most consumers. The use is clear and evident. Tablets aren't pocket-able. You have to carry them around with you and so the business case is a lot less clear for many folks."

In contrast to IMS forecasts, consultancy Frost & Sullivan previously said the Brazilian tablet market shows great growth potential and could threaten smartphone and netbook sales.

Frost identified the corporate market as a ripe target for tablet adoption. The sector purchased about 5% of total devices bought in 2010, but could account for 30% by 2015. The pharmaceutical, construction and consumer goods verticals in particular have shown early enthusiasm for tablets, it said.