Telcos struggle to sell tablet computers – research

27 Jan 2012

Are consumers ignoring telecoms retailers and going directly to manufacturers like Apple to get their hands on hardware like the iPad 2?

Telecoms operators are struggling get a meaningful slice of the growing tablet computer market due to consumers, daunted or confused by data plans, going directly to manufacturers like Apple to buy their cherished devices.

According to the latest research from Informa Telecoms & Media, the tablet market will explode over the next five years, with retail revenues increasing from US$34.5bn in 2011 to US$121.5bn in 2016.

Operators’ share of the tablet retail sales are being limited by increasing interest from independent retailers, such as Carphone Warehouse, Amazon and Tesco.

Then there are the challenges faced by operators in convincing consumers to take out data plans attached to these devices and a notable preference amongst consumers to purchase these devices direct from manufacturers, such as Apple.

“We already expect independent retailers to increase their share of smartphone retail revenues – our smartphone forecasts show the independent retailers’ share of smartphone retail revenues increasing from 29pc in 2011 to 34pc to 2016 – and we expect this trend to be even more prevalent in the tablet segment,” says Julio Puschel, principal analyst at Informa Telecoms & Media.

“Tablets will drive significant changes to the current telecoms retail business model. New entrants, such as Amazon and other consumer electronics specialists which have already a very evolved online and multichannel strategy, will drive online tablet sales even faster than online smartphone sales, which will force operators to review their multichannel approach,” adds Puschel.

Transforming the retail experience

Puschel adds that independent retailers are innovating and promoting significant changes in telecoms retail, such as modernising their stores to offer a better customer experience, product testing and offering specialised customer support that also focuses on consumer education.

As handsets develop and become more complex, presenting their features and benefits to consumers is more of a challenge for operators. Specialist retailers have to date proven to be better able to educate consumers by providing an enhanced, interactive shopping experience.

“Telecoms operators will need to watch the independent retailers closely to see how they are transferring their retail expertise to the smartphone and tablet market.

“They need to be able to offer an outstanding shopping experience that can match or outperform the independent retailers – not simply pushing device sales, but also demonstrating the services, content and applications attached to these devices,” Puschel said.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years