Why The iPad Could Be Huge in China

I’ve stumbled across some interesting research from Citi Group Financial’s internal research group. The research report was specifically about tablets but the part I found interesting was their research related to tablets and China.

Citi surveyed almost 2000 people and found some interesting results globally for tablets. With the US they found that tablets and specifically the iPad were not an immediate threat to replace PCs. Their research pointed out that in the US only 8% had purchased a tablet with the intent of replacing a laptop. The bulk of the usage of tablets the research turned up was for more lightweight consumption. Things like web browsing, email, social networking and multimedia were the top usage models. Their China research however turned up very different results.

It appears that in China there are significantly more people looking at buying tablets and using them as a laptop replacement. 21% of the people in their China survey said they currently own a tablet compared with 17% in the US/UK. 26% of China respondents said they intend to purchase a tablet over the next 12 months compared to 12% in the US/UK.

More interestingly with this data was that 31% of Chinese respondents said that their interest in purchasing a tablet was to replace their notebook. Another 26% expressed interest in a tablet to replace their desktop and another 30% interested in replacing their Netbook with a tablet.

The reason the iPad could be huge in China is firstly because China is a huge market and second because they appear to be interested in a tablet as a PC replacement. Which is a fundamental difference than why US and UK consumers are buying tablets.

If it was clear before it should be crystal clear now why Apple is so laser focused on China. In fact all the trends in China are playing to Apple’s favor. The iPad for example has 73% of the tablet market share in China and we can expect that to grow over the next few months and even more with version 3.

The other interesting thing about China is that it is one of the fastest growing regions for PC sales. This data seems to suggest that China could also become one of the fastest growing regions for tablets as well.

When I first read this data, I thought it seemed a bit too optimistic about China and tablets. Mostly because we are constantly reminded by all the large PC vendors how fast China is growing as a market for PCs. So this data seemed at odds with the reality that PC sales are accelerating in China.

PCs are still maturing in China so why would there already be significant interest in tablets over PCs? The answer I feel lies with China’s need and desire as a market for small and mobile technologies.

Netbooks had quite a run in China and for many Chinese consumers Netbooks were the best priced and sized computers for their first PC purchase. The iPad in terms of size and mobility are highly desirable among the Chinese consumers and may be some of the central reasons they are attracted to tablets so heavily.

Because China is so large and because PCs are selling like hotcakes over there I don’t suspect that tablets will eat into PC sales in any way that should alarm manufactures. Both will continue to grow and accelerate extremely quickly.

It is important to note that the China based research was done with those who are in the upper and rising middle class, which is a large and quickly growing segment of China consumers.

Whether it is with iPads or Macs Apple has a huge opportunity in China.

[thumbsup group_id=”2946″ display=”both” orderby=”date” order=”ASC” show_group_title=”1″ show_group_desc=”0″ show_item_desc=”0″ show_item_title=”1″ ]

Published by

Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio

8 thoughts on “Why The iPad Could Be Huge in China”

    1. That is a good question, however if it is a laptop replacement then the price is roughly the same as mid-level PCs. So price comparison by product would be equal. Clearly price is always a factor to some degree. However when compared with PCs its less or equal.

      That is what is interesting about the idea of tablets as PC replacements. That is also why many PC vendors are concerned about what level of PC sales tablets eat into. All are very valid concerns and only time will tell.

      This is all early data.

    2. Not much. A couple years ago, I gave my niece in China $500 USD to buy a laptop. She bought a Dell, and sent me a picture. I looked at it and realized it cost more there, than here. The growing, upwardly-mobile Chinese middle class won’t see the price as an impediment. In fact, Apple products in China are more like a Giffen good. The Chinese see the relatively high price as more desirable. Of course, they like bargains as much as you or I do, but a high price confirms in their mind that Apple is the best.

  1. I have no idea, so I am wondering: Do the Chinese see the iPad touch screen as an improvement over a laptop’s keyboard as far as inputting Chinese characters is concerned?

  2. There are going to be more and more consumers that are going to realize they don’t need a full desktop OS to get on with their daily lives. I don’t know what type of programs the Chinese use on their PCs. Are most of them fully utilizing Windows by running Microsoft Office and Photoshop or are they really just using their Windows PCs to surf the internet, keep social contacts and look at videos? Most desktops can really suck up energy and if consumers don’t need to waste electricity, then why even bother with a desktop. Tablets are very green. Once Apple allows consumers to sync devices without using a desktop or notebook, that should really help to eliminate everyday PC desktop use.

Leave a Reply

Your email address will not be published. Required fields are marked *