I’ve been tracking nuances of the global tablet market since the origins of the category. As I emphasize in my analysis, we know not all tablets are created or used equally. I’ve also been adamant about explaining that, when I look at tablet usage data, we essentially have two tablet markets. Tablets with a brand on them from companies like Apple, Samsung, Lenovo, Dell, etc., and a huge market of white box tablets made by no-name brands, sold at prices in the $100 range.
Our usage research shows these low end tablets, counted in the category labeled “other” in data reports, are essentially being used as portable media players — larger pieces of glass to watch videos and play games. Very little web browsing or downloading of apps is done. However, with the price of these white box tablets, it is time to start thinking differently about their usage and ultimately the role they play in consumer’s lives and homes.
For much of the last three years, essentially the short life of the tablet category, these low cost white box tablets have sold in massive numbers in markets such as China, India, Russia, and a few others, but not much in developed markets like the US or UK. Last quarter however, something interesting happened that may very well signal a changing tide.
According to IDC, RCA joined the ranks of the top five global tablet vendors by shipments into the channel in Q3 2014. Here is the chart of the tablet model.
How did RCA go from essentially zero in shipments to the number five spot out of nowhere? To begin, we need context. I discovered RCA’s shipments were entirely to Walmart and the US market. To be clear, a US retailer amid heavy promotions propelled a new entrant with virtually no tablet market credibility to the number five position globally for Q3 2014 quarterly shipments. ((RCA was long sold off but a company named Venturer Electronics has the rights to the name for products like tablets and is the maker behind these devices.)) Here is the full lineup of RCA tablets.
Walmart offers the 10″ with a keyboard case for $129.99 and the 7″ with a keyboard case for $59.99. Here is my take on how this happened. Firstly, these are rock bottom prices. Knowing quite a bit about Walmart’s typical customer, they likely saw the tablets at these prices and, having a general interest in tablets to begin with, recognized the RCA name and figured they couldn’t be that bad. These are likely used in many of the same ways as white box tablets in emerging markets. For games, video, and some internet. And at these price points, these products essentially become disposable. Now this is where the point gets interesting. As these prices become the norm in retail outlets everywhere, why not just buy several and stick them in every room in the house? Put one next to your bed to be used for your bedside web browsing tablet and alarm clock or use it as a portable TV for the kitchen or the bathroom while getting ready for work. Take it outside to watch video by the pool or garden. Put three in the car and leave them there. Coffee table tablets, one for every child in the home, multiples in every room just laying around waiting to be used by whoever. At these prices, why not? If it breaks, just get another one. There is very little downside to treating them as disposable pieces of smart glass to be used in any number of fairly simplistic ways. Believe it or not, prices will keep getting cheaper and from more brands and in more retail outlets than Walmart, thus making the barrier to entry even lower and increasing the availability of these low cost tablets. Cheap, numerous, disposable pieces of smart glass in every US home. A fascinating and potentially disruptive change of dynamics could be around the corner.
Of course, our readers will start asking what does this mean for Apple. I have several thoughts. I still believe the iPad is being used to do something very different than what I have outlined. However, as much as I like the new iPad commercials, they highlight things that CAN be done with the iPad but that the majority DOES NOT do with an iPad most of the time. Unfortunately, the iPad is used to do simple things by simple users to do many of the tasks I’ve mentioned. The iPad is undoubtedly 300% more capable than all the low end tablets. However, my concern is the mass market has either not fully utilized those capabilities or more worryingly, has no real intention to do so. The tablet’s ultimate mass market appeal may very well be to simply have a general purpose piece of glass laying around for every person in the house to use for any number of very simple, mostly entertainment-based tasks. In this case, these low end tablets may outnumber humans per household. Which makes the tablet market number much larger than many have projected. But, for Apple, fighting the “good enough” battle with these low end tablets is a strand of thought worth working through.
These are still early days and I’m providing our readers with some observations to discuss. This could be something or it could be nothing.
“However, my concern is the mass market has either not fully utilized those capabilities or more worryingly, has no real intention to do so.”
I think the 2nd point in that sentence hit the mark, as far as the pure consumer space is increased. That segment of the market does not utilize nor needs that much power. If you look at the traditional PC era the majority of pure consumer users bought a PC to do light weight tasks (web browsing, email, managing photos, music, messaging, Skype, MS Word, etc.).
Now in the era of mobile devices, their usage patters haven’t really changed. There was a really interesting tweet by Benedict Evans on how smartphone use is replacing PC even faster than tablet was replacing PC use, again in the pure consumer space.
https://twitter.com/BenedictEvans/status/542406273858146304
The large smartphone (5.5″), for the majority of average users, does what it needs to do and it’s always with you and always connected. I know a few people who don’t use their iPads as much now that they have a phablet, be it an iPhone 6 Plus or non-ios device. The iPad will make its mark in those areas where it’s hired to make or save money;
creative professionals
Key business verticals (ie: replacing clipboards as you’ve mentioned before)
Education (more specifically lower grades)
Gaming
Benedict and I agree and I’ve made the point myself about how smartphones can go for the everyday light consumer. What the PC has done was overserve the mass market needs. I’ve laid that out before. What it seems is that for many the iPad may also over-serve the mass market. It has its role that I’m certain of but Apple needs consumer to want to take advantage of its capabilities and that is the challenge.
“As these prices become the norm in retail outlets everywhere, why not just buy several and stick them in every room in the house?”
Agreed. That’s what I do now with name brand tablets. I have several. The ones without SD slots never leave the house. Ever. All content is through my home network. I won’t tolerate being out with a machine that so heavily depends on connectivity. Since I got my SP#, I find that I haven’t left the house even with the SD bearing tablets either.
I assume your considering the more affluent buyer buying a whole bunch of cheap of cheap tablets (sounds like $1000 worth in the article). Clearly, the likely customer is not that person, either by desire or by finances.
As I stated it is early, but there is a lot of logic behind why it may likely go this way. It could just start small where people pick one or two up but then realize all the different things it can do and as prices drop by some more.
It is absolutely a race to the bottom and will continue to be. This will cause the business model shift I have been talking about for some time and open the door for a service provider to figure out how to monetize beyond hardware.
This is a very interesting trend and I am quite excited to see where it will take us.
You mentioned a tablet in every room. I think we could also segment by the task. For example, there could be a “study” tablet and a “play” tablet for kids. There could be a tablet that they give when you enter a baseball stadium so that you can look up stats during the game. There could be a “presentation” tablet that is handed out during a scientific presentation that is loaded with multi-media content supplementing the presentation (which everybody can use without jamming the WiFi). There might even be a Disneyland tablet that they might hand you instead of a map, and which you can take home as a souvenir if you wish. Prices might have to drop a bit lower for many of these things to happen, but they are no longer unthinkable.
What it would mean is that the number of tablets in our lives could be even higher than one-per-room.
Of course there are issues. These tablets are really low quality and recently their security settings came into question. However, I expect this to be resolved as the Chinese manufacturers realize that they have to be more careful.
Cheap tablets may ultimately become our “paper”. That is, these tablets may simply become a physical surface onto which content gets layered onto. Just as brochures or pamphlets are handed out and thrown away after a glance, cheap tablets might become like this. If this indeed becomes that case, then I would expect companies like Adobe, companies that align closely with content creators to regain relevance.
As for what Apple may do, it’s obvious that Apple will never release a tablet at rock-bottom prices. They do however have a product that is sub-$100 and that is the Apple TV. Hence if Android is becoming the new TV of our lives, would it make sense for Apple to turn Android tablets into an Apple TV? What if they released an app that simply made Android tablets into AirPlay capable screens (with multi-touch)? You could enjoy the content that resides on your iPhone in your pocket, but read it on a larger screen that just happens to be lying there in your room.
Ultra-cheap tablets open up a lot of questions and opportunities. Something fascinating might happen.
An interesting question worth teasing it, is if these devices could be trojan horses for Android tablets, and in essence even Android in iOS dominated US homes.
Regarding iOS vs Android, I agree a case can be made for the Trojan horse possibility. I am however entrigued by how this could affect all tablets, all IoT, all software and all tech.
I think the logical conclusion/trend is not to have a tablet in every room/disposable tablets, but to have a communications interface on a number of surfaces i.e. IOT interfaces within whatever is convenient. Don’t think cheap tablets, imagine watch/screen interfaces in cars, bathrooms, kitchens etc in perhaps hub & spoke configurations.
Another problem with these very cheap tablets is the problem with vulnerabilities and potentially malware included with the boxed product.
https://bluebox.com/business/santa-or-the-grinch-android-tablet-analysis-2014/
The RCA devices contained vulnerabilities because of their dated software but no overt malware according to the analysis but other cheap tablets were not so fortunate.
Stuff happens. There was a time not too long ago that some iPods shipped with Windows viruses on them.
Not too long ago? It was 8 years ago, affected one percent of video iPods in a one month period and happened because of a Windows terminal on the production line. It only affected Windows PCs, Apple reported about 25 cases of the virus, and it was all shut down and solved within a month. You’re playing a bit fast and loose with the truth there pal.
Why so defensive? I didn’t lay blame on Apple, but it happened to them too. I blame the bad guys. That it could happen at all, even to Apple’s much lauded supply chain is the point. This was the EXACT thing jamesdbailey was concerned about OTHER’s doing.
I see the double standard is strong with you.
No, no, you don’t get off that easy. James was concerned about this issue on a larger scale. Your incredibly tiny edge case doesn’t have anything to do with the actual issue of low cost manufacturing and the problems inherent in cheap goods. Every company, yes even Apple, will have all kinds of problems from time to time. But that is a separate issue from what could become systemic (non edge case) security problems due to the low cost of the goods in question.
Add to that your use of the phrase ‘not too long ago’, because you wanted to make this sound recent. It wasn’t. Then you said ‘some iPods’, which makes it sound like it was a fair amount. It wasn’t. Then you said ‘viruses’ plural, which it wasn’t.
You stretched the truth and you got caught. Want to backpedal some more?
You’re ever the Apple apologist.
Of course it’s understood that if this can happen to Apple, it can happen on a large scale. It can happen on a large scale to anyone.
Not backpedalling. I stand by my original comment.
PS-If you want to “sugarcoat”, at least use sugar.
“You’re ever the Apple apologist.”
I’m not, but I understand this is the direction you have to take now to save face.
It is unlikely that producers of high end goods will be affected by quality issues (security being just one aspect) on the same scale, as often, or in the same way as producers of low end goods. By the very nature of Apple’s minority position in the market (or Mercedes, or any other producer of high end goods) it may even be impossible.
As for standing by your original comment, that’s just silly. 8 years is in no way ‘not too long ago’, one percent (and a couple dozen affected devices) is not ‘some’, and a single virus is not ‘viruses’. End of discussion.
It’s the direction I took from the beginning. In this case, Apple was the victim (as were some of their customers). It is YOU that judged me as being derogatory on Apple. I admit, I usually am, but this is about the bad guys. A person voiced a legitimate concern, but looked away from Apple, when in fact, Apple was a prominent example of what he feared.
As far as temporal distinctions and what constitutes “some”, I leave you to argue your own semantics.
I’m not sure I get the point of arguing with klahanas. He is a one track record. We know where he stands.
And you pointing out a possible scenario, involving other’s, that has already happened to Apple lets us know where you stand too. Isn’t freedom grand?
True, I try to limit my interaction, but sometimes I think it’s worth a comment to offer a correction when he’s way off in la la land.
What about security on cheap tablets? There is none today. Will there ever be an OEM that will absorb the costs of protecting, securing, and supporting cheap tablets (and phones)?
Will Apple’s 10% (not 1%!) buy Apple devices because they are willing to pay the Apple premium to get Apple’s responsible protection and support?
Ok let’s explore this. Is this the OEMs responsibility or Google’s? Microsoft offered a 7″ full windows Toshiba tablet for 79.99 over cyber Monday. Maybe Microsoft has an opportunity?
Lastly if these things are not used in a way where sensitive information is given, like a portable TV or bedside alarm, etc, then how big of an issue is security?
Is it really either’s responsibility in the end? All computers are hackable. All of them. It’s not the OEM’s fault, it’s not the OS provider fault (too much), it’s the bad guy’s fault. The one’s I hold accountable is my security suite provider. That’s what I pay them for.
I think you have to keep in mind that it is still very early. Security is likely to be an issue but as Ben mentions, from a user perspective, they don’t want to put secure information on these devices anyway.
The problem right now is that by default, Android tablets ask you for your password when you first use it, and it will then automatically set up your Gmail and other stuff on your device. Current day devices assume that the device is personal, and are harder to use otherwise.
If this trend continues, I envision many of these tablets will be automatically set up so that they don’t prompt you to log into Google. They should also automatically default to a private browsing mode so that your teenage daughter’s browsing history is not visible to the whole of your family. I don’t want retargeting ads to tell everybody that I went to that website for treating baldness. Whether this is capable with Google’s version of Android, or whether you have to use ASOP will be interesting.
Also, I have to add is that security is not just about storing sensitive data. If malware could be installed on the device so that the video camera could be turned on, and the images sent across to a malicious server, that would be scary enough.
“All computers are hackable.., it’s the bad guy’s fault. The one’s I hold accountable is my security suite provider.”
I guess you’ve highlighted what makes Apple unique. Alone, among all OEMs, Apple has a strategic ‘DNA level’ commitment for the complete and effective protection/security of its customers’ Apple devices. Apple measures its success against this nearly impossible standard.
So, they spend $Bs and decades pursuing security and at this point, they have shipped Secure Enclave, Touch ID, Apple Pay, iTunes and the App Store.
Apple’s systems aren’t all invulnerable, but they are by far the most invulnerable to malware, piracy, and the NSA types.
Nope!
“Closing the system doesn’t count, because the cure is worse than the disease.”
Tell that to Sony, the NSA, and Hollywood.
A while ago we were involved in a debate here on Techpinions about where I supported the notion of the “appliance computer” (portable TV, bedside alarm). These devices you describe are exactly in the direction of the arguments I made back then on PC (general purpose) versus Applicance Computer.
Yes, it seems what is interesting about that point, is that the number of appliance computers will dramatically outnumber the general purpose ones (PC, smartphone.) I buy this argument, and the specific purpose nature/value proposition of developing connected smart appliances that play a specific role.
I think the OEMs are to blame for malware and not having the latest versions of software. This isn’t like the phone industry where carriers block access to new software updates. And sending tablets out without securing them is definitely not something that Google can do anything about.
See:
https://bluebox.com/business/santa-or-the-grinch-android-tablet-analysis-2014/
Also, these tablets have browsers and are advertised as full tablets including software from the Play store. Even if they aren’t used heavily for online transactions, many will be used that way putting the purchasers at serious risk. These tablets aren’t being sold in an Asian market as a TV replacement but in a country where users are bombarded with information on how to use tablets to replace PCs. I think the security risk is quite serious.
Responsible protection and support ?
http://bgr.com/2011/05/20/apple-instructs-support-reps-to-refute-malware-deny-assistance/
http://www.macworld.co.uk/feature/iosapps/is-ipad-iphone-ios-safe-what-security-software-need-3453938/
Bgr and Mac world are Apple’s bitches, don’t bother
I have observed a very interesting iPad usage trend within senior community. My mother lives in a senior assisted living building downtown Chicago. It is a 15 story building with at least 10 apts per floor. ~ 35% of the community living there has iPad – it’s growing every day. Most of these individuals have never used PC or laptop, but with iPads I see them all around the building. They carry it in their hand, like a book or a folded newspaper. You can see them sitting in the community center and reading news, watching videos, skyping with their friends and family, playing games, and some of them Facebook (but not as much.) When they Skype, they set it up in the middle of the room, high up so that the camera is strategically positioned, and go about their business while having conversation. Sometimes they talk for an hr. They use you tube instead of TV and lots of times watch it together. Others that don’t have iPads congregate around and watch too. When they read news, they sit next to each other (each with the iPad in their lap) an compare notes and make commentaries. They are also quite good at search and finding information.
Some of them have smartphones (iPhone and others), most don’t. But those that have smartphones say they cannot use iPhone the same way as iPad. It is too small.
Initially, I tried giving my mother a higher end Android tablet. She would use it but would have all kinds of issues. She would somehow mess up configuration, could not connect to wi-fi, etc. She finally said that all of her friends have iPad and she wants one. With iPad, we rarely ever get IT support calls. Not sure if it is simplicity of use, or they help each other with problems, or combination of both but iPad works here.
“Not sure if it is simplicity of use”
It is exactly this. Apple works very hard on making computers simple and accessible. We got my parents an iPad Air, it is the first computer they can and do use regularly.
I got the same result with an Android tablet though. My mom uses it 50x as much as the family PC, and I get 10x fewer calls about it, usually because she keeps forgetting how to setup a new wifi network when at friends’, sometimes because widgets are slow to update her mail and weather forecast (usually linked to wifi ^^)
Android is certainly getting better, and the more Apple succeeds by making computers simple and accessible, the more Android/Google will strive for the same thing. It’s good for everyone. We saw this happen with PCs (the fight against the simplicity of the GUI/Mac was lost long ago), and I expect the same pattern to play out as we go forward. The abstraction of the computer is the future. This will probably mean more integration re: Android and a move towards a more closed system. It is inevitable.
The closed system never won.
Most of the systems we use across most industries in our daily lives are closed and regulated. It is a natural evolution. In the PC industry there are essentially two players, Mac and Windows, both are closed and regulated systems. You can argue degrees and modularity of course, but you cannot seriously argue that either system is truly open. Android was open in the beginning as a strategy, and it will become more closed going forward. This is simply the reality of how it must evolve. But if you feel you must yell “Open!” and “Market share!” at the top of your lungs, please feel free to do so.
Sorry but by open I didn’t mean open source.
I don’t know what marketshare has anything to do with this.
“Sorry but by open I didn’t mean open source”
Read carefully and you’ll notice I did not say ‘open source’ either. I suppose you should define what you mean by open.
“I don’t know what marketshare has anything to do with this.”
Typically market share is used as a measure of ‘winning’, especially when it comes to Apple and open vs closed. You did say “The closed system never won”, and while you didn’t reference market share directly, that is the only measure by which your comment makes any sense at all. Many closed systems across many industries are incredibly successful, including Apple. In fact, closed and regulated systems are the norm (closed usually wins), which is why it is obvious to me that Android will move in that direction. Humans like closed systems, they tend to deliver a better experience.
“Android was open in the beginning as a strategy, and it will become more closed going forward.”
Right… Any proof of that or is it just in your head? Give an example.
Windows and OSX are open. iOS is not. I’m not going to bother explaining a very simple concept.
The fact that you mention marketshare in a discussion that is not even vaguely similar suggests that you already made up your mind about what you think my point is. Next I’m going to yell “open”, “marketshare “, right?
Meaning you actually had this discussion many times before with other people, found a pattern and built a stereotype that you love arguing with, having no intention of opening your mind or actually having a discussion. The definition of trolling.
Good day.
“Windows and OSX are open. iOS is not. I’m not going to bother explaining a very simple concept.”
Well, if you want to make claims about open and closed systems then you do need to define your terms.
If we want to get really persnickety, there’s no such thing as a fully closed system or a fully open system, neither is actually possible. Even iOS does have interaction with the external environment, so in that sense it would be classified as an open system. Windows and OSX are more modular, certainly, but they are both limited/governed by rules and regulations and in that sense are closed.
Android is becoming more closed, in one sense we see that Google is focusing on its own apps within Android and abandoning open versions. The fact that analysts now discuss Android as two entities, Google and non-Google, proves my point. Google is exerting more control over Android, to the extent that it can.
This is a natural evolution. Closed systems do tend to win, simply because they work better. This is why I always find it so fascinating in the tech/nerd world when people talk about open winning, or in your case “The closed system never won.” Your statement isn’t based in reality, it is dogma.
The more I thought about this, the more I realized “the simplicity of use” is not necessarily correct way of looking at it in my mother’s case. Better term perhaps is “focused user experience” (English is my second language as you can probably tell :)) What, I mean by this is the following: my mother is old-school European Physicist by profession. She knows her theory, but she is not afraid to experiment with unknown. With Android and all of the available config options, she is tempted and she does experiment. That is where trouble starts. With Apple, she just takes it as is and is not tempted to do anything more.
I’ve been a part of a number of studies on the older generations use of iPad’s and we observed nearly universally many of the same things as you. I have no doubt the iPad is the right product for this market.
What I proposed above is not that these low-end Android tablets affect the iPad’s use as a personal computer, but instead become the communal, or special purpose type tablet that gets used by everyone to do very simple tasks.
From what I see around me, the overwhelming majority of iPad users do not to anything different than the Android users; furthermore, the rest of users (let’s call them “special needs” users to subvert a euphemism) are as likely to use premium Androids (for the pen, size, peripherals, SD cards…) or Windows (for the apps).
Also, no user only use their tablets as a media player. They all at least have games, email, IM/Social.
Apple’s ads are being inspirational: you could do that with your tablet. Buy our iPad, and people will assume you’re not just watching YouTube (or worse, a personal tablet is much more discreet than a shared PC) and playing Candy Crush. It seems people are willing to pay a lot to project that image ^^
Research from IBM & others suggest otherwise.
Link ? The only such research I’ve seen didn’t filter for demographics for example. The usual correlation != causation issue.
Write more, thats all I have to say. Literally, it seems as though you relied on the video to make your point. You definitely know what youre talking about, why waste your intelligence on just posting videos to your weblog when you could be giving us something informative to read?
Do doctors tell patients the reasons of an illness?Recently, my friend was able to reduce his blood-pressure pill in half just by cutting on cheese and meat. For last many years, he has been going to physician for heart checkup and taking one pill a day.Doc never stressed him that diet and exercise can make him better.Similarly for diabetese, artheritis etc.There is a clear conflict of interest when doctors benefit by prescribing more medicines and tests.
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it’s awesome article. I look forward to the continuation.
Great post Thank you. I look forward to the continuation.
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