Dubai: With branded tablet manufacturers playing an aggressive part in the entry-level price range, will unbranded or Tier-2 manufactures find it difficult to stay afloat?
“We have seen traditional PC vendors like Lenovo, ASUS, Toshiba, Samsung, HP, and Acer, become much more aggressive in terms of their product launches and pricing strategies, enabling them to capture a greater share of the market and negatively impact the share of other local and Far-Eastern low-cost tablet players,” said Fouad R. Charakla, research manager at International Data Corporation.
The UAE tablet is witnessing growth but not at the rate it had a couple of years ago.
“Cannibalisation of tablets was taking place during the last three of four Gitex with retailers offering cheap tablets for every product purchased,” said Nadeem Khanzadah, head of retail at Jumbo Electronics.
He said that there were lot of complaints about the cheap tablets and the return rate was very high. Buyers are fed up with multiple cheap tablets at home.
The UAE tablet market is set to grow by around seven per cent in the third quarter of this year to 442,879 units compared to 413,944 during the same period last year.
“We have also seen the number of tablet market players reduce slightly over the past year, as some of the brands exited due to high competition,” Charakla said.
But he added that some price-conscious people will still prefer cheaper tablets, especially if they are buying for children, but many will pay the “extra buck” to go with a reputed brand.
Can unbranded vendors sustain in the market and compete with branded vendors?
Yes, says Althaf Alam, general manager for Quantum UAE and GCC, a division of Saudi Prince Al Waleed Bin Talal Bin Abdul Aziz’s BDL Group.
“We work very closely with Microsoft and Intel and have very good relations in terms of planning, marketing and designing. In the last nine months, we have sold 450,000 units in the region,” he said.
New product features
He said that a customer who cannot afford a Samsung or Apple is ready to look for any brand that is value for money.
Being an OEM brand, “we have the leverage of launching new product and features much before a branded vendor does. It is surprising to sound but we have done it. The branded vendors will take a small share from the unbranded vendors, but many unbranded vendors with scale will stay,” he said.
Today’s customers are very smart; he said and added that they want the best price and best service. No one in the tablet industry that offers three-year warranty with three-year pick up and drop services, and three months swap on Quantum tablets. “MNCs have limitations,” Alam said.
Quantum aims to sell 850,000 units for the year and expects to be in the top five by next year.
But Mohammad Hilili, general manager at Lenovo Gulf, said that people are very brand conscious in this region.
“What had happened in the PC business will happen in the tablet space. This [tablet business] is scale game and if the unbranded vendors do not have the scale, it is difficult to survive. It is not only in the tablet space but also in other consumer electronics products,” he said.
When recognised brands come in at entry-level prices, Neelesh Bhatnagar, CEO of Emax said that OEM brands will only be used for bundling and as a free give away.
“It is going to be the same as in the television segment. When the Korean manufacturers reduced the prices, lot of local original equipment manufacturers (OEM) were wiped out and the same thing will happen in the tablet space also,” Bhatnagar said.
“It will definitely be difficult for local and unestablished brand vendors to compete with well-reputed multinational vendors, but they can still address a certain price-sensitive market,” Charakla said.
