Tablet Success Dependent On Price

Although the success of the Apple iPad is all but assured, tablet device makers are being advised to significantly lower the cost of the devices in order to ensure their sales success.

Tablet Crazy

A May survey by Boston Consulting Group found that tablet devices such as the Apple iPad are expected to become “one of the most successful consumer electronic/tech products,” with 50 to 75 percent of consumers purchasing one within the next three years.

Noting that both single-purpose e-readers, like Amazon.com’s Kindle, and multipurpose tablet PCs, such as the iPad, are selling well, BCG surveyed 13,000 consumers across 14 countries, looking to discover the prices consumers would be willing to pay and how they’d use such devices, among other questions. What the survey found was a willingness to purchase – but at the right price and with the right capabilities.

Globally, 66 percent of surveyed consumers said they’d prefer a multipurpose device to a single-purpose e-reader, while 24 percent preferred a single-purpose device.

“They also expect to do more than just read, suggesting that e-readers/tablets will become the first truly converged device,” BCG’s report said. Among US consumers, 90 percent of those surveyed said they expect to be able to browse the web, 84 percent wanted emailing capabilities and 74 percent wanted to watch videos.

Willing To Pay

When it came to reading, however, consumers were willing to pay for content, with US consumers reporting they’d be willing to spent $5 (£3.40) to $10 (£6.80) for a digital book, $2 (£1.36) to $4 (£2.72) for a magazine and $5 (£3.40) to $10 (£6.80) for a monthly newspaper subscription.

Google and Apple, with their respective bookstores, should also take note, as BCG reported that “Ninety-one percent of existing e-reader/tablet owners say that the ability to buy content from more than one store would encourage them to buy more.”

Although 53 percent of surveyed Americans said they preferred a multipurpose device to a single-purpose one, compared with 66 percent of respondents worldwide, Americans reported themselves slightly more likely to buy a tablet or e-reader in the next year. While 28 percent of worldwide respondents said they were likely to purchase one in the next year, 29 percent of those in the United States said the same.

When the time frame was stretched to three years, 57 percent of all Americans surveyed said they were likely to purchase one, versus 49 percent of the worldwide mean. Among respondents who were already familiar with such devices, 73 percent stated that they were likely to purchase an e-reader or tablet within the next three years.

What they were willing to pay, however, varied considerably by country. Respondents in Norway expressed the highest price tolerance, saying they’d pay between $150 (£102) and $200 (£136) for a single-purpose reader. In the United States, that low end was the high end, with Americans saying they’d pay $100 (£68) to $150 (£102) for such a device. For a multipurpose tablet, those in the United States were game to spend between $130 (£88) and $200 (£136), compared with Norwegians’ $220 (£150) to $340 (£231).

Current Prices

Currently, the iPad retails for between $429 (£292) and $829 (£564) in the United States (elsewhere, prices have been found to be higher) and the Kindle e-reader sells for $259 (£176). According to BCG, the Sony Reader Pocket Edition e-reader is priced at a more consumer-friendly $169 (£115), while the Sony Reader Touch Edition is priced at $259 (£176).

Widespread adoption, BCG concluded, “will depend on a drop in price and shift toward multifunction devices. The sweet spot for multipurposed devices seems to be $130 (£88) to $200 (£136) [and] $100 (£68) to $150 (£102) for single-purpose devices.”

Still, there is demand for these devices. Even at its current prices, it took Apple only about a month to sell more than 1 million iPads.