New research by The Boston Consulting Group points to the continuing segmentation and fragmentation of the fast-growing tablet market. Consumer demand, combined with the early success of Amazon’s Kindle Fire, likely presages a period of expanding choice as users seek different combinations of size, features, price, software, and services. BCG partner Dominic Field, one of the study’s coauthors, talks about the latest trends in tablets.
How is the tablet market evolving?
Tablets are becoming mass-market devices much faster than we predicted just 18 months ago. Sales are expected to reach some 370 million units in the first five years—the fastest consumer-electronics-device ramp-up ever. Some 30 percent of respondents in our U.S. survey own a tablet or an e-reader—that’s almost double the 16 percent of a year ago—and half of nonowners say that they intend to buy a tablet or an e-reader in the next year. Even if you discount for intention versus actual purchase, these are huge numbers. Ownership rates are lower in other countries, but the pace of increase is even higher—nearly fourfold in the U.K., for example, and the numbers have tripled in both France and Spain.
Growth is only part of the story. Consumers are also driving segmentation of the market away from one-size-fits-all models—such as the iPad—toward different devices for distinct purposes. You’re seeing this play out in the success of Amazon’s Kindle Fire—a $199 tablet optimized for e-reading and supported by a big content ecosystem. It can also do the other things people want—e-mail, Web browsing, and social networking. A number of new models introduced at the recent 2012 International Consumer Electronics Show are priced from $170 to $250.