NEW YORK, January 23, 2012—Consumers are driving segmentation of the fast-growing tablet market away from one-size-fits-all models toward different devices for distinct purposes, according to a new survey of 8,700 consumers in the eight top markets worldwide. The research, conducted by The Boston Consulting Group, confirms trends BCG first observed in a similar survey more than a year ago and points to tablet purchasers’ growing desire for choice in functionality, price, and supporting ecosystem.
“The door is open to iPad competitors that can offer attractive combinations of size, features, price, software, and services optimized around a particular use or uses,” said Joachim Stephan, a BCG partner and coauthor of the study. The results of the research will appear in Not Carved in Stone: Consumer Trends and Market Segmentation, the most recent article in BCG’s Tablet Market series to be published today on www.bcgperspectives.com.
Willingness to Pay Is Rising, but Consumers Want Choice
U.S. consumers are willing to pay from $140 to $240 for a multipurpose tablet—an increase (at the midpoint) of $35 since 2010. In Europe, willingness to pay has jumped about $100 in the past year and is now generally in the $250 to $350 range. The Chinese consumers that were surveyed—Internet users in major cities—were willing to pay from $280 to $440 for a tablet, or $185 more than in 2010.
“The iPad is great but expensive for a lot of people,” said Dominic Field, a BCG partner and coauthor of the study. “Early results suggest that Amazon’s Kindle Fire, priced at $199 in the U.S., has found the sweet spot. Other companies are targeting this zone as well, as evidenced at the recent International Consumer Electronics Show, which featured several tablet introductions at prices in the $170 to $250 range.”
Tablets’ Market Share Growing at the Expense of Other Devices
Tablets and e-readers are attracting considerable market share from home PCs, laptops, portable media devices, and netbooks. Approximately half of the consumers surveyed plan to purchase a tablet rather than a netbook. One-third are considering a tablet over a home PC or laptop. One-third are considering an e-reader instead of a netbook or portable media device, and one in five is also thinking about choosing an e-reader over a PC, laptop, or smartphone. Among tablet owners, one-third to one-half report that their tablets are likely to replace their PCs, laptops, netbooks, and portable media devices.
Consumers Worldwide Want a Windows Tablet for the Work Environment
Currently, tablets are being used mainly for personal activities such as e-mail, Internet surfing, and social networking. More than 90 percent of U.S. tablet owners use their tablets at home in the evenings—and 80 percent say they use them in bed.
The survey found that many consumers would prefer to use tablets for work as well, but two factors in particular appear to be holding them back. One is speed: faster performance was cited by more than two-thirds of all consumers as likely to increase their tablet usage for work. The second is the absence of a Windows-based device.
U.S. and Chinese consumers BCG surveyed in mid-2011 expressed the desire for a tablet running Windows. Two-thirds of all consumers in this—our latest survey—report that a tablet with Windows capability would likely lead to more work-related usage.
Other Key Findings
About half of nonowners in the U.S. say that they intend to buy a tablet or an e-reader in the next year. Purchase intent is even higher elsewhere, with almost every country surveyed showing double-digit increases, with the exception of Japan, which lags in tablet ownership.
Approximately half of consumers are interested in purchasing a tablet rather than a netbook. A third are considering a tablet over a home PC or laptop.
Between one-third and one-half of current tablet owners think it likely that their tablets will replace their PCs, laptops, netbooks, and portable media devices.
One-third of consumers are considering the purchase of an e-reader instead of a netbook or portable media device.
The willingness to pay for tablets is much higher in Europe and China than in the U.S., with optimal price ranges 50 to 95 percent higher in Europe and 90 percent higher in China.
In Europe and China, consumers are willing to pay larger increases (more than $100), while U.S. consumers expressed a willingness to accept a more modest $35 increase.
Nearly nine out of ten U.S. consumers plan to use tablets for e-mail and Web surfing.Expectations and reality vary on video viewing.
About 80 percent of U.S. respondents say that they expect to watch videos, while only 63 percent of current device owners actually do so.
The Boston Consulting Group (BCG) conducted a survey of some 8,700 consumers in eight countries: China, France, Germany, Italy, Japan, Spain, the U.K., and the U.S. The latest survey, the third in a series, was conducted in November 2011.
To receive a summary of the survey findings or arrange an interview with one of the authors, please contact Alexandra Corriveau at +1 212 446 3261 or firstname.lastname@example.org.
To download a copy of the article, please go to www.bcgperspectives.com.