INDIAN INSTITUTE OF PLANNING AND MANAGEMENT,NEW DELHI

TABLET COMPUTERS MARKET: BOOMING IN THE WEST BUT LAGGING IN INDIA. WHY?

NAME: BATCH: ALUMINI NO: GUIDE

NIMESH ANAND PGP/ SS/2002-04/ DS24-M005 MR.VIJAY BODDU

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ABSTRACT
The launch of Apple iPad in 2010 was seen as a major change in the way how media will be consumed in years to come. To experience the sweet taste of success which Apple recently witnessed with its Tablet innovation, many brands have announced the launch of some parallel devices. Tablet PC market is in nebular stages currently, with just a handful of players. And the market is expected to grow with more than 100new Tablets being launched this year. In order to carve a niche of their own the companies need to differentiate themselves strategically. This research looks at market of Tablet PC and key attributes considered important by the consumers of other mobile devices, like smart phones and PC. The report will highlight the factors which are a barrier in the success of tablet computers in India. Through Primary and secondary data analysis and findings, the report will bring insights to the tablet industry's performance in India and how it can supplement the overall global sales. The research done is both quantitative and qualitative because of the nature of the product. Questionnaire method was used to collect the quantitative data and focus group was conducted for the qualitative data. Based on the findings and analysis, recommendations have been made to further assist the tablet industry.

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CERTIFICATE OF ORIGINALITY

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ACKNOWLEDGEMENTS
I would like to offer my sincere respects to IIPM,which provided me with the power of knowledge and instilled confidence in me. Mr. Vijay Boddu, and Mr. Ramakar Jha who are my internal guide for this project. Mr. Atul Pandey, manager Marketing, Retail Business division, Canon India Pvt. Ltd for being so helpful and as an external guide, providing me with the insights into the industry. Special mention to Management Students in Pune,for helping me gather as many response as possible. Last but not the least 'Google', which has literally put the world at your computer. The secondary data was sieved through them. Primary data collection was made simpler because of 'Face book' and 'Twitter'. The social platform helped garner much data in a very short span of time. This thesis is being completed only because of the efforts of the mentioned people. I hope this report will be helpful to the readers understand the concept of tablets and its position in the Indian market. If you have any questions regarding the report, or anything in general please write to me on nimeshanand@gmail.com or send your tweets on my Twitter handle@nimeshanand.

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TABLE OF CONTENTS

INTRODUCTION TO TABLET COMPUTERS

TABLET COMPUTER OPERATING SYSTEM OF TABLETS MARKET SHARE OF OPERATING SYSTEMS

INDUSTRY OVERVIEW
FACTORS CONTRIBUTING TO A TABLETS ECOSYSTEM

MOST USED APPLICATIONS BY PERCENTAGE APPLE i-Pad's SUCCESS STORY INDIAN TABLET MARKET: AN OVERVIEW SECONDARY DATA ANALYSIS
TABLET LEADERS IN INDIA-SALES & REVENUE SHARE OF VARIOUS OPERATING SYSTEMS IN INDIA BUYING BEHAVIOUR OF CUSTOMERS REASONS FOR NON GROWTH OF TABLETS IN INDIA VALUE PROPOSITION SEGMENTS OF TABLETS CURRENTLY SOLD IN INDIA CUSTOMER SEGMENTS ASPIRING FOR TABLETS FACTORS WHICH LEAD TO BUYING OPPORTUNITIES CREATING AND TAPPING INDIAN MARKET

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CASE STUDY

PRIMARY DATA FINDINGS AND ANALYSIS

QUANTITATIVE QUALITATIVE

RECOMMENDATIONS CONCLUSIONS AND IMPLICATIONS BIBLOGRAPHY APPENDICES

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LIST OF FIGURES AND CHARTS

FIGURE 1 TABLET IMAGE FIGURE 2 OS CLASSIFICATION AND TYPES FIGURE 3 WORLD MARKET SHARE OF OS FIGURE 4 REVENUE FORECAST FIGURE 5 MARKET SHARE OF OEM'S FIGURE 6 APPLICATION STORES USAGE FIGURE 7 TABLET MARKET SHARE INDIA (REVENUE) FIGURE 8 PRIMARY DATA ANALYSIS CHARTS

LIST OF TABLES

TABLE 1 TABLET SALES (PAST,PRESENT & FUTURE) TABLE 2 INDIA Q2 MARKET REVIEW,2012 TABLE 3 INDIA Q2 MARKET REVIEW,2012-TRENDING TABLE 4 SEGMENTS OF TABLETS SOLD BASED ON PRICE TABLE 5 VALUE PROPOSITION TO INDIAN CUSTOMER

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SYNOPSIS

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AREA OF RESEARCH: MARKETING (MARKET FORECASTING)

TITLE : Tablet Computers market: Booming in the West but lagging in India. WHY?

PROBLEM DEFINITION: Tablet computers have shown massive growth and future potential, to grow even bigger, but Indian figures are not complementing the success story .Why hasn't the Tablet Computer not made inroads in the Indian market as compared to the West, and what are the factors which will make it a success with the Indians.

HYPOTHESIS: Indians seek value in their purchase irrespective of the product. Tablet computers, though have their advantages and vast adoption rate in the west, is considered more of a 'consumption 'device with little or no 'productive' advantages. With the high end tablet computers matching the prices of a decent 'Laptop' computers, Indian's prefer the later. With the launch of entry level and mid-range tablet computers ,along with the support of the cellular service providers and Government help, the adoption rate will increase.

RESEARCH OBJECTIVES: With my research intend to fulfill the following objectives: 1) Facts determining the growth of the Tablet computer market and its potential to be the largest selling device, surpassing smartphones and laptop computers. 2) Key features and technology used in tablet computers and key players in the field.
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3) Indian tablet market-overview, statistics and past performance. Potential of the tablet market to grow in proportion to the global tablet computer market. 4) Which age-group and industry adopts the tablet and who is more likely to buy in the near future? 5) How can the tablet manufacturers, Cellular service providers and the Government help the South East Asian and in particular the Indian market to grow? 6) What technologies can a customer expect in a tablet computer in the near future which will enhance the market?

LITERATURE RELATED: Tablet industry is still in its nascent phase, hence lot of research material is being sourced from the Web/Internet, Mobile and web applications of news channels and newspapers, technology sections of leading channels and papers. The key sites are the web pages of the leading tablet manufacturers like Apple and Samsung Market statistics web sites for the secondary data. News paper and magazine articles from the 'Times of India', 'Business Today','IBN7','NDTV gadgets' and 'Engadget'.

SCOPE OF THE THESIS WORK: This research will help the readers can study the result, from the analysis of data and understand the following: To study the growth of tablets in the developed markets and the potential in growing markets. Can entry and mid level tablets help the developing markets to grow Can tablets become as generic as desktop PC's,Laptops and mobile phones. Will it replace them or will it complement them and exist along with them. emerging trends in the Indian market.
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RESEARCH METHODOLOGY: The following method is followed in the research. The data is mostly secondary for the macro point of view, which provides the insight and an overview of the overall industry and players. Primary data is limited to the Indian respondents and has been largely collected to find out about their interpretations of the tablet computer, its benefits, costs and applications in their day to day life. The data source of primary and secondary importance is listed below, along with the sampling method and size. Secondary data: Collected and analyzed through the web sites of key players like 'Apple','Samsung',etc.Industry reports from the sites like NDTV gadgets,Engadget,IBNlive,The Hindu, The Economic Times, The Times of India, From the Google's 'Android' data and the Windows 'mango' data. Primary data: Collected through Questionnaires, telephonic interviews, focus groups and online social website polls on "Face book" and "Twitter". The online methods have helped me significantly enhance my sample size without physically being present there ,in addition to the 'neutral' audience which I got through "Twitter". Sampling method: Simple random sampling method is being used. Sample size: In all a total the data of 500 people is to be collected and analyzed. Target Audience: Students in the 18-24 years age group in colleges and Post graduate programs and 24-45 years age group employed in private or public sectors. Tools and Techniques used: sampling data will be both qualitative and quantitative for better understanding of 'emotional impulse buying' vs. 'buying based on hard facts'. Questionnaires Telephonic Interviews
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 Focus groups Online Social medium, eg-'Facebook' and 'Twitter'. Summer Training: With 'Mekaster India Pvt. Ltd' New Delhi during 'April-June2003'. The company was into marketing of 'survey' equipments, with special emphasis on selling the 'GPS' based survey equipments. I collected data from the leading Construction and survey companies in and around Delhi/NCR on the possible adoption of the 'GPS' based equipments in their firms. The product in question was from an American company 'Trimble'.

External Guide details: Name: Designation: Mr. Atul Pandey Manager Marketing, Retail Business Division.

Organization: Canon India Pvt Ltd.

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INTRODUCTION TO THE TABLET COMPUTERS

'Tablet computers' or 'tablets', is not an uncommon word today. From students to working executives to professionals and even housewives, know about the new phenomenon known as 'Tablets'. Before we explore further into the realm of the tablets, let us find out a few things about them. What is a tablet? what does it look like? what are the advantages of having a tablet? what are the different choices the customers get from the manufacturers? These few questions would give the readers a fair idea of what we are talking about (as if the readers don't know already, but for the sake of the research it is mandatory).There are plenty of things which an average person would already know about, but there are a lot many other things which he doesn't know. So here we will start with the basic understanding of a tablet.

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TABLET COMPUTER
A tablet computer, or a tablet, is a mobile computer, larger than a mobile phone or personal digital assistant, integrated into a flat touch screen and primarily operated by touching the screen rather than using a physical keyboard. It often uses an onscreen virtual keyboard, a passive stylus pen, or a digital pen. Tablet Computer or simply called tablet , is a computer that has a touch screen with either stylus , digital pen or your finger for all operations eventually eliminating your standard keyboard. Tablet PCs have changed the way we do business, the way we use computers. Tablets are the future of Computing. Tablets bring in some great features like Handwriting Recognition , Voice Recognition and most important is Freedom of Movement. Tablets have become famous with HIDs - Home Interface Devices. Tablet PCs are changing the way we do business. Tablets empower mobile professionals to work from anywhere at any time, bringing new levels of mobility to virtually every industry. Tablets are light weight , fully-functional PCs with all the cutting-edge mobile technology. It's a device that provides a much more natural user interface as compared to the traditional Desktops or Laptops

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Today we have tablets for our personal use or even attached to a Refrigerator which can help you peek into all recipes , make a note of things to do , stay in touch with your friends or even have a video chat while cooking. That's the power of "Technology" made for everyone , everywhere. Tablets are mobile devices , hence it has connectivity options like Wi-Fi , Bluetooth and Infra-Red. Here's an image of a Tablet PC and its components.

Figure:1

OPERATING SYSTEM OF TABLETS:

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There are some key players in the tablet industry, with the market leader 'Apple', with its iconic i-pad,setting the standards. The i-Pad was launched in 2010,with huge success. It was cheered across the whole developing world, particularly in the North American ,European and the Australian regions. It had 91% market share to start with and still leads the tablet battle with a 68% share today.

All the tablets, like good old computers, run on an interface, called the 'Operating system'. The operating systems of tablets are designed specifically to enhance the 'touch' user experience and support the 'entertainment' content in a much more 'enthralling' manner. The i-Pad uses the i-os ,Samsung and others use the 'Android', Blackberry playbooks use 'QNX', and Microsoft with its latest announcement, is going to use 'Windows-8' for their tablet 'Surface'. Most of these OS are being used currently in various smartphones and tablets, with few variations in the forms to suit the device. i-os is used only in the 'Apple' owned devices and is closed to other manufacturers, Samsung and many others like Asus,HP,Dell,Lenevo,Motorola etc use the 'Google' open ended OS called the 'Android'. Off late there have been various upgrades on the devices using respective OS to increase the user experience and efficiency of the devices.

figure 2
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MARKET SHARE OF THE RESPECTIVE OPERATING SYSTEMS:

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figure 3:

Android

Apple's i-OS

INDUSTRY OVERVIEW:

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Tablet computer industry is currently valued at $15 Billion and the industry is growing at a phenomenal pace. It is expected to touch $25 Billion by 2015. The chart shows the revenue growth forecast till 2017.
Fig:4

source: IDC

In terms of number of units the shipment is around 100 million units and is expected to sell more than 200 million units world- wide.

source: www.accuracast.com

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How the various operating systems and the various players have performed and what will be their position in the future is something which has and will shape the tablet market. In 2010,'Apple' launched its i-pad to massive success. The term i-pad is synonymous to tablets today, the same way as once, Xerox was synonymous to photocopiers. Such has been the dominance of i-pad in the tablets category. Let us look at the market share of different brands and all the operating systems through these charts.

Figure 5

Apple

7% 8% 14%

14% 57%

Amazon Samsung Barnes & Noble others

Apple dominates the market through 57% share in Q4 2011.The share has increased but official figures are yet to be released. Amazon with its kindle fire takes 14% along with other brands. Samsung with 8% share leads Barnes & Noble (7%),by one percent. (source: Gartner)

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OPERATING SYSYEM SHARE ( Past, Present & Future)

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FACTORS THAT CONTRIBUTE TO A TABLET'S ECOSYSTEM:

Tablets are mainly used because of the various 'applications' ,in short 'apps' ,available from the operating system's respective 'App-Store'. These apps are used for gaming,productivity,reading/watching news or programmes,chatting,entertainment,social platforms access and a lot more. Different OS have different names for their app store. 'Apple' has i-store, Android has goggle play, Blackberry had Blackberry App world and Windows has Windows Market Place. Let us see how many active applications have been running on each platform. Figures are in thousands (000')
Figure 6

500 400 300 200 100 0

500

300

apps

30 i-store Google play

source: CC analysis,

35 windows market place

Blackberry app world

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WHAT KIND OF APPS ARE BEING USED MOSTLY AND WHAT PERCENTAGE OF PEOPLE USE DIFFERENT KINDS OF APPS

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WHAT HAS BEEN THE CATALYST OR THE MAJOR FACTORS FOR THE TABLET'S SUCCESS?

Among the prime reasons why the Tablets have been successful in the developed markets is the affordability factor. Nearly all the high-end smartphones and Tablet devices come with a

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carrier, called the service provider, which subsidizes the device cost by providing them on a low down payment and a fixed number of contract years.

For e.g. an i-pad when announced goes to the service providers who 'lock' the device with their network and sell to the customers on contract. This way it ensures high subscriber base for the service providers on one hand, and low initial cost to the customers, on the other. In North America there are three major players in the field. Verizon Wireless, AT&T and Tmobile. Now while selling apple announces that their i-pad 32 GB (Gigabytes) model is $249 on a two year contract and $549 without contract. This is a big difference and has a huge impact on the consumer buying behavior.

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APPLE'S i-Pad SUCCESS STORY

All we have to do to understand why the iPad has dominated the market is look back at Apple's recent history. The iPod was introduced to an unsuspecting world years ago, offering a radical departure in how users listened to music. This was a common pastime for millions, and the iPod simply made it better and more enjoyable.

Apple improved the iPod every year, not radically but in simple ways, and made it cheaper. Competitors scrambled to best the iPod without success, because they took the path of adding whiz-bang features that didn't matter to most consumers. Remember Zune squirting? Neither do the millions of folks who bought an iPod, or two or three.

Apple duplicated the model proven so successful for the iPod when it introduced the iPhone. It tapped into the existing iPod music ecosystem, and added the ability to do things folks already did, but easier and more enjoyably. Buyers flocked to the iPhone, not because it could do lots of things they never thought of, but because it made the things they already did much better.

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Then the iPad hit the scene, and Apple took the successes of the iPod and iPhone and rolled it into the new tablet. It let buyers do the things it could do on both the previous i-products, but better with the larger screen. It was still easy to use and carry, but could make the things prospective buyers already wanted to do, better and more enjoyable.

Now Apple is clearly following the successful business model with the iPad, refreshing it every year. Not making it radically different or better, but better in simple ways. The company has figured out what drives buyers in the mainstream, and that is the desire for controlled change.

Human nature delights at change, finding something new or new ways to do common tasks. This is true for the youngest toddler up through the oldest grandma. We simply love finding a new thing to make what we enjoy even better. This controlled change is the basis for the Apple model proven so successful with the iPod, iPhone, and now the iPad.

This is where competitors to the iPad are failing miserably, and will continue to do so. The iPad popularity is already proven in the market, so competing products are built with more sophisticated hardware under the hood. The philosophy is to be better it must have lots more to offer, but that doesn't work.

In almost every case, making a competing product with more sophistication intimidates the average consumer. I'm not referring to the small percentage of tech-savvy consumers who
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delight in learning radically new things. The regular consumer has a knee-jerk reaction to having to learn totally new things, and this is the major failing of competing tablets.

It gets back to the controlled change that Apple gives us with the iPad. Just new enough to be a delight to discover, but not radically different to require learning a lot of new things. You pick up the iPad, quickly discover how easy it is to do what you already like doing, and you never think more about it. Pick up a competing tablet and you have to figure out not only what you can do with it but how to make it happen.

The controlled change that is successful for Apple is going the be the biggest hurdle for Windows 8 tablets coming down the pike. Even if these are intuitive enough to use out of the box, the Windows moniker implies that a lot of learning will be required to use them. There will be a knee-jerk reaction to this for the average consumer, and they won't look at them seriously.

The Apple model has been proven once again to be wildly successful with the iPad. This will continue as the product evolves year after year while competitors scramble aimlessly to make a difference. Apple haters will get louder while railing against the methodology the company is using, but millions will continue to buy iPads. Apple is giving the mainstream consumer what it wants, yet again. (Source: Mobile news)

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INDIAN TABLET MARKET: AN OVERVIEW

Tablet as a product category is still at a very nascent stage in India. However, the last fiscal year witnessed a good growth in this segment, as Indian consumers embraced the product with open arms.

The overall India Tablet market recorded sales of 0.55 million units in 2Q 2012. This was reported in the India Quarterly Media Tablet Market Review for 2Q 2012 released today by premier IT, Telecoms, Semiconductor & Electronics, Government, Entrepreneurship, Energy & Healthcare and User research firm Cyber Media Research.

According to a survey done by Voice&Data, the tablet category grew by a whopping 750% last fiscal year. In FY 2010-11, the tablet category clocked revenue to the tunes of Rs. 231 crore, while by the end of March 2012, this category had garnered Rs. 1,962 crore. Contrast this with the marginal 0.33% overall growth in the user device segment comprising of mobile phones, data cards, fixed phones and tablets.

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SECONDARY DATA AND FINDINGS

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TABLET LEADERS IN INDIA- SALES AND REVENUE SALES

In the overall India tablets market, Micromax leads with 18.4% share, followed by Samsung at second position with 13.3% and Apple at third position with 12.3%, in terms of sales (unit shipments) during the 2Q 2012.

Table 2.India Quarterly Media Tablets Market Review for 2Q 2012*

Vendors Micromax Samsung Apple

%Share 18.4 13.3 12.3

*Source: CyberMedia Research (CMR) India Quarterly Media Tablets Market Review, 2Q 2012, September 2012

Though the India Tablets market is still at a nascent stage but at the same time has become competitive due to entry of new vendors with entry level offerings. Close to 90 vendors launched their tablets till 2Q 2012.TheASVof the tablets in 2Q 2012 has dropped to little above

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INR 13,000 from INR 26,000 in 1Q 2012, as a majority of vendors in early 2012 launched their products in the INR 5,000-10,000 price range.

Trends

According to Faisal Kawoosa, Lead Analyst, CMR Telecoms Practice, During 2Q 2012, 47.4% of tablet sales were from new entrants in the market with a strong focus on addressing application areas in the Education and Entertainment segments. The import of this stance clearly demonstrates that vendors are aiming to position their devices atIndias youth population.

Some of the key trends in terms of specifications of media tablets in India noted in 2Q 2012 are listed in the table below.

Table 3. India Quarterly Media Tablets Market Review for 2Q 2012*: Trending

Feature Connectivity Display OS Wi-Fi 7 Android

Trending 69.6 79.7 87.5 45.9 59.7 83.5

% Share

Processor Speed 1 Ghz RAM Call Feature 512 MB No

*Source: CyberMedia Research (CMR) India Quarterly Media Tablets Market Review, 2Q 2012, September 2012

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As Android devices become increasingly popular with users across the world, competition is increasing in the India Tablets market with more and more vendors launching devices based on the Android OS. The share of devices based on other operating systems like Windows, iOS and QNX are expected to rise in future in view of the recent announcement of the Microsoft Windows Surface Tablet, the global launch of the Apple iPad 3 and reduction in BlackBerry Playbook prices, Faisal further added.

Going forward we see vendors launching devices for particular industry segments other than Education, such as Healthcare, Retail and e-Governance. In terms of tablet use cases, the popular categories are Internet browsing, Email, Entertainment, Gaming, Social Networking, Information (Cricket, Flights etc). Clearly, the Indian user is also taking to the Tablet as a content consumption device, added Tarun Pathak, Analyst, CMR Telecoms Practice.

What is even more interesting is that in the Indian tablet market Samsung is a clear leader of the pack and managed to accumulate 56.52 percent of revenues. Samsung currently is offering tablets in four different screen sizes, 7-inch, 7.7-inch, 8.9-inch and 10.1inch tablet. In totality, the Korean cheabol claims to be offering 17 tablets in India. The latest tablet variant launched by Samsung is Samsung Galaxy Tab 2 310.

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The second spot has been captured by Apple with its iPad. The company has managed to collect 22.53 percent of revenues. Of course, these numbers don't include any iPads sold through unofficial channels, which is rather sizeable. RIM came in a surprise third with 6.17 percent of the market share, with others accounting for the rest. market share.

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REVENUE WISE

Figure 7

In the last one year one has seen a lot of Indian companies get into the Indian tablet market with their competitively priced offerings such as Micromax with its Funbook tablet, iBall Slide, Milagrow TabTop et al, but no one has been able to make a distinct mark so far.

Even the much talked about Aakash tablet, which has been touted as the world's cheapest tablet and carries a price tag of Rs. 2,276 has not been able to generate revenues for its parent company, Datawind.

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A research report says that in 2011, Apple had a market share of 51% in India while Samsung had a market share of 24%. This is despite the launch of ultra-low cost media tablets in the second half of 2011. Blackberry Playbook from RIM is the third largest player with a 10.4% market share.

A report by ABI Research says that Apple has maintained its premier position in the market with iPad. Samsung has extended its success in the handset market to the Tablet PC segment with its Galaxy Tab. Indian consumers have shown a strong penchant for RIMs Blackberry Playbook after its prices were slashed significantly.

The report says that ultra-low cost Tablets with non-optimal specifications might ruin the user experience and may prove to be a dampener for Tablet PC growth in India. Research analyst Aishwarya Singh says While there are several media tablets launched in th e sub-$200 price range, simply lowering the average selling price of media tablets may not lead to the desired growth in the market. However, the report says that media tablets from domestic manufacturers like Micromax may be the right products at the right price point for the mass market.

In 2011, a total of 0.39 million units of media tablets were shipped in India compared to a total of 65 million shipped globally. However, the Indian media tablet market is expected to grow at a CAGR of 71% and shipments are expected to grow to 9.66 million units in 2017.

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2012 is going to be an important year in the Indian tablet market as there are ample media tablet models available across different price points, adds Jeff Orr, consumer research grou p director. An enhanced user experience, seamless connectivity options, and localized content will drive the media tablet market growth.

PAST SCENARIO

source: CC Analyst

Clearly, Samsung took the advantage of launching the tablet in the form of galaxy tab in 2010,before Apple. However Apple bounced back and took the leadership board in 2011,before conceding to Samsung again in 2012. The Indian customer takes its time before upgrading his gadget. There are a lot of variables he considers before the final buying trigger is pulled.

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SHARE OF VARIOUS OPERATING SYSTEMS IN INDIA

Currently, Android's 'Ice-Cream-Sandwich(ICS)(4.0)' and Jelly-Bean(JB)(4.1),is running as an upgrade to previous Android versions (as per the device compatibility), and has garnered a vast market share not only in India, but throughout the world. Android is the most widely operating system in the world today surpassing i-OS. Samsung is leading the crusade for Android with more than 56% share and other low cost devices lifting the Android share to over 65% in India.

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INDIAN CUSTOMER'S BUYING AND PROGRESS TO OTHER CATEGORIES

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WHY HAS THE TABLET MARKET NOT GROWN IN NUMBERS TILL DATE
VALUE PROPOSITION

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SEGMENT OF TABLETS CURRENTLY SOLD IN INDIA

Table 4

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WHAT IS THE INDIAN CUSTOMER LOOKING IN A TABLET PC

Table 5

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CONSUMER SEGMENT WHO ASPIRE FOR TABLETS

USERS

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FACTORS

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OPPORTUNITIES

India, with the second most population in the world, and high consumption rate, is a huge market. With the growing income, the 'Marginal Propensity to Consume(MPC)' is also increasing. The consumption in Electronics has seen a huge surge and the Tablet market can benefit tremendously from it. The table shows the consumer base and demand of key electronic goods in India.

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All we can say is that, it is just the tip of the iceberg. With the right strategies and product mix, Tablets can write history for themselves and change the overall demographics of the electronic goods industry.

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HOW TO CREATE AND TAP THE INDIAN TABLET MARKET

CREATING VALUE PROPOSITION IN THE TABLETS: CULMINATION

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ENHANCING THE USER EXPERIENCE

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PRICING

India has witnessed aggressive sales and growth rates, when the prices of smartphones were slashed. Let us see the trend with sales vis-a-vis the price cuts

price cut will most definitely boost the sales of the tablets.

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INTRODUCING FEATURES WHICH INDIANS SEEK IN A DEVICE

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SUPPORT ( GOVERNMENTAL AND CORPORATE)

Tablets are meant for the user experience, Cheap tablets, without that will render the whole purpose of the tablets, hollow. Although it is advisable to keep the prices low, but quality should be standardized. Many state governments have also announced to distribute free Tablets, which will definitely bolster sales and customer base.

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CASE STUDY THE FOLLOWING CASE SHOWS THE INSTITUTIONAL SUPPORT TO TABLETS TO DELIVER EDUCATIONAL CONTENT.

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PRIMARY DATA
FINDINGS AND ANALYSIS

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QUANTITATIVE

In the primary data collection, a 'Questionnaire' was used (see appendix) and distributed through various channels( E-mails, hard copy and social networking).

There were a total of 487 responses received and recorded. The sample population was a controlled group, which was selected. These individuals were having exposure to internet and 'Smartphone' technology. Based on the analysis of data, these were the findings.

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QUESTION

ARE YOU FAMILIAR WITH 'TABLETS' AND WHICH BRAND DO YOU KNOW OF?

NO

YES

YES

487
0 100 200 300 400 500 600

NO

BRAND RECOGNITION/RECALL
Apple/i-Pad, 100

100 90 80 70 60
%age
Samsung/Galaxy Tab, 100

50
40 30 20 10 0
Apple/i-Pad HCL, 20 Motorola, 15

Micromax, 40

Karbonn, 38

others, 16 Kindle fire, 8 Lenovo, 5

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All the respondents were having knowledge about 'Tablet Computers'. There was not a single person in the group who didn't know about the device in question. In terms of brand awareness, there is a 100% brand recognition/recall to Apple's 'i-Pad' and Samsung's 'Galaxy Tab'. The Indian 'OEM's (Other equipment manufacturers),namely 'Micromax' and 'Karbonn' has 40% and 38% recall. Rest of the companies HCL, Motorola, Lenovo and Amazon's Kindle Fire have 20%,15%,5% and 8% ,respectively. Others had a share of 16%,comprising of OEM's, such as, Blackberry, i-ball slide, olive pad, etc.

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QUESTION DO YOU OWN A TABLET?

22%
YES

78%
NO

108 Respondents owned a tablet which makes 22% of the sample population. Now let's have a look at the age-wise brand ownership.

12 10 8 6 4 2 0 16-20 21-25 26-31 32-38 39 and above

apple samsung micromax motorola hcl blackberry

others

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As per the results, Samsung has been the clear leader as per the ownership with almost 39% share, followed by Apple's i-Pad with 18% share. Micromax, within a short span of time, has garnered with 14% share because of branding and low pricing. Motorola (4%),HCL(9%),Blackberry(7%) and Other brands(9%) share rest of the pie. Other brands includeHTC, Karbonn, i-Berry, Acer iconia, i-ball etc. PERCENTAGE OWNERSHIP OF TABLETS AMONG VARIOUS AGE GROUPS

39 & ABOVE

32-38
26-31 21-25 16-20 0 10 20 30
%AGE

Age-group 21-25 has maximum ownership with 25% followed by 16-20 age group with 22% then 26-31 and 32-38 age group with 20% respectively. Age group 39 and above lags behind with 13%,which is expected with these sort of purchases.

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QUESTION WHY DID YOU CHOOSE THAT PARTICULAR BRAND OF TABLET? AFTER SALES 14%
COST BENEFIT

MARKET PLACE 1%

OTHERS 3%
BRAND VALUE

SCREEN SIZE 3%
COST BENEFIT 16% CONNECTIVITY 10% BATTERY LIFE 22% OPERATING SYSTEM 11% BRAND VALUE 20%

OPERATING SYSTEM BATTERY LIFE

CONNECTIVITY

AFTER SALES

SCREEN SIZE

MARKET PLACE

OTHERS

Among the current users, Battery life(22%) has been given the top preference, followed closely by brand value(20%).After sales(14%),operating system(11%),cost benefit(16%),connectivity(10%),make the chunk of the pie. Screen size(3%),market place(1%) and other factors(3%) complete the pie. These results are from active users who purchased the tablet based on the reason they gave. There are users who want changes in their next tablet, hence have given preference accordingly.

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QUESTION WHAT PURPOSE DID VARIOUS AGE GROUP BOUGHT THE TABLET FOR?

12
OFFICIAL USE

10
ENTERTAINMENT

8
POPULARITY

6
FUTURE GADGET

4 2 0 16-20
4% 6% 9% 36%
OFFICIAL USE ENTERTAINMENT POPULARITY FUTURE GADGET INSTITUTIONAL OBLIGATION INSTITUTIONAL OBLIGATION OTHERS

26-31

39&ABOVE

21%

24%

OTHERS

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As we can see that 36% of people have bought it for official usage like E-mails, browsing, office etc. Out of this 36% ,there were no users in the 16-20 age group who used tablets for office use. this table will explain the overall scenario. PURPOSE
AGE GROUP

16-20 0% 38% 35% 20% 17%

21-25 31% 27% 22% 10% 33%

26-31 23% 15% 175 30% 17%

32-38 26% 12% 17% 30% 17%

39 &ABOVE 20% 8% 9% 10% 16%

OFFICE USE ENTERTAINMENT POPULARITY FUTURE GADGET INSTITUTIONAL OBLIGATION OTHERS

22%

255

20%

205

13%

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QUESTION WHY HAVE YOU NOT BOUGHT OR USED A TABLET?

EXPENSIVE

16% 31%
LIMITED ABILITY

6% 5% 13% 14% 5%
CONNECTIVITY BATTERY

10%

LESS VALUE TO A LAPTOP UNCERTAIN FUTURE

31% of the population, who don't have a tablet, aspire for one. Other factors like cost(16%),Preference to a laptop/net book(14%),Battery life(13%) and lack of choice(10%), are considered as a hindrance in buying.

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AGE GROUP-WISE FACTORS FOR NOT BUYING THE TABLET

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

LOOKING TO BUY SOON LACK OF CHOICE UNCERTAIN FUTURE LESS VALUE TO A LAPTOP BATTERY CONNECTIVITY LIMITED ABILITY EXPENSIVE

16-20

21-25

26-31

32-38

39&ABOVE

Factors

Age-group

16-20

29%

19%

15%

14%

10%

15%

5%

24%

21-25

26%

28%

20%

17%

10%

10%

11%

22%

26-31

16%

33%

25%

23%

17%

20%

24%

24%

32-38

10%

10%

30%

29%

32%

25%

26%

17%

39& up

19%

10%

10%

17%

31%

30%

34%

13%

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QUESTION WHICH OPERATING SYSTEM WOULD YOU PREFER IN YOUR TABLET?

50 45 40 35 30 25 20 15 10 5 0

ANDROID

i-OS

WINDOWS

QNX

OTHERS

16-20

21-25

26-31

32-38

39&ABOVE

4% 9% 38% 16%

ANDROID i-OS WINDOWS QNX OTHERS

33%

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QUESTION WHAT IS THE ADEQUATE PRICE RANGE FOR A TABLET?

BELOW 5K 5K-10K 10K-15K

25 20 15 10 5 0

15K-20K 20K-25K 25K-30K 30K-40K ABOVE 40K

16-20

21-25

26-31

32-38

39above

8% 15%

4% 11% 9%

BELOW 5K 5K-10K 10K-15K 15K-20K

17% 17% 19%

20K-25K 25K-30K 30K-40K ABOVE 40K

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QUESTION WHAT 'ADD-ON' FEATURE YOU WANT TO SEE IN YOUR TABLET?

AGE GROUP FEATURES 16-20 21-25 26-31 32-38 39 &ABOVE

SCREEN RESOLUTION

3.4

3.8

4.3

LIGHT WEIGHT

3.6

3.8

3.9

3.5

PEN INPUT

2.4

3.3

3.5

3.4

3.7

KEYBOARD

2.2

3.3

3.8

3.9

BETTER BATTERY

4.1

4.4

4.2

CONNECTIVITY

3.8

4.2

3.9

INSURANCE

3.2

3.6

3.9

3.7

BETTER OS/PROCCESSOR

3.5

3.8

3.6

3.3

CALL FUNCTION

3.9

3.5

3.8

3.7

3.3

Weightage given to different features by different age groups on the scale of 1-5.

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QUESTION WHO WILL MAKE THE PURCHASE DESCISION ?

45 40 35 30 25
SELF PARENTS

20
15 10 5 0
16-20 21-25 26-31 32-38 39above

SPOUSE

FRIENDS

COLLEAGUES

10% 21%

PARENTS SELF SPOUSE

36% 19%

FRIENDS
14%

COLLEAGUES

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QUALITATIVE
To get an insight further in the tablet market in India, a focus group was also conducted. There were 6 participants chosen for the focus group. Specific questions were asked to fulfill the objectives of the focus group. OBJECTIVES: To find out what people think of 'Tablet' device. To Find out their preference when buying 'Tablet computer' To find why Apple is lagging behind the competition in India. What can be done to boost the sales of 'Tablets' in India. The 6 participants were1) Ankit Gupta, Male, (32)- Business man, Married 2) Garima Anand, Female, (30)- Executive, Married 3) Abhishek Kaushal, Male, (35)- School Owner, Married 4) Manish Srivastava, Male, (33)- Executive, Married 5) Anubhav Singh, Male, (29)- Businessman, Married 6) Saurabh Rai, Male, (38)- Sr. Manager, Married

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Question- What do you think of Tablet computers? 1) Tablets are a luxury device, primarily made for entertainment. 2) Tablets are future laptops, which will replace all the gadgets as we know of. 3) Tablets are easy to carry. Important but still expensive in India. 4) Future gadget. Technological improvements will make them affordable. 5) Too early to tell their impact on Indian consumer. 6) Will survive and grow if the manufacturers can show value to the consumers.

Question- What factors would you consider before buying a 'Tablet'? 1) Price, but not compromising too much on features. 2) Handy, call features and application storage. 3) Affordable and can handle educational contents. 4) After sales and sturdy device. Cost should be justifiable. 5) Games related hardware, storage and definitely Android. 6) Smooth office handling,HDMI output, Keyboard dock.

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Question- Apple is the choice of almost every individual, but hasn't got the same upbeat response in India. Why?

1) Overpriced. 2) Too big to carry around and expensive as compared to competition. 3) Expensive for majority of the population. 4) Service network is not owned by the company and expensive to own and maintain. 5) Applications are not exclusively made for India. 6) Price and lack of choice in price segments. Network a major issue. Niche product

Question- What Should 'Apple' do to overcome the sluggish response? 1) Cut price 2) Introduce smaller variant at competitive price. 3) Reduce the price. 4) Get a proper distribution & service network and reduce the price for mass adoption. 5) Content should relate more to Indian consumers. 6) Introduce more variants at various price points. Make feature rich to maintain niche if revenue is a concern.

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Question- How can the Tablet sales be further boosted in India?

1) Options at various price points but quality should be acceptable. 2) Introducing more content rich tablets at adequate price brackets. 3) Showing the customers 'value proposition' with respect to laptops. 4) Home grown companies would bolster the sales with their understanding of Indian consumers. 6) Making 'Tablets' personalized will help increase the sales like mobile phones. Hence more and more companies need to come in the market to offer choice to customers.

Question-Will 'contract based 'selling increase sales in Tablets?

1) Yes, but only in high end tablets. For that the e-payment penetration has to be very high. 2) Definitely. It will increase the affordability factor. 3) Considering the demographics, the system has to be fool-proof to benefit the companies. 4) Not sure. The Laptop segment boomed without any support of this kind.EMI option worked but Tablets need to show the same value as opposed to laptops, for the customers to go for EMI schemes. 5) Mobile sales rocketed because of mass adoption, Giving credit in tablets will only result in higher default rates of payment. 6) Indian customers have a long way to go to avail such benefits. No doubt if a system is devised and executed as per plan, it will definitely grow the consumer base.

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RECOMMENDATIONS

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Based on the findings and research, the following recommendations are advised to help increase tablet penetration in India: 1) Creating value in Tablets for the Indian customers, who are still trying to figure out the value proposition of a tablet in comparison to a Mobile phone or a Laptop. This means making tablets feature rich for the customers so as to help them adopt the device. 2) Micromax, with its fun-Tab has sold more number of units this quarter than any player in India. This shows that adequate pricing and quality will help penetrate the complex Indian customer. Cheap tablets were present before also but were not able to achieve the sales as Micromax has. Micromax has integrated all the 4 P's of marketing in their offering. Similar Products will increase sales overall. 3) High-end tablets will register a much higher growth if some of the key features are 'tweaked' to fit the Indian mindset. Battery life and connectivity(in-built sim slot) are one of the features. Culmination of a decent Smartphone and a net book in a single device will make the proposition hard to resist. 4) The tablets cannot be delicate anymore. The kind of portability we are talking about comes with its fair share of rough handling. The sturdiness of the tablet is a given along with after sales service of the product.

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5) OEM's need to be creative with their product offing. There has to be more options given to the customers in terms of Operating systems, Screen size and processor speeds. Given the demographics, the form factor should also vary for different genders and classes of people. 6) Apple is coming out with its 'iPad mini' later this year. It will definitely draw huge crowds and mass adoption rates. India is also likely to see huge adoption of the mini i-pad. The competitors should match the product with their own versions to attract the customers. This is an opportunity for people going for 'Phablets' (Big screen phones),give a shot at the next gen tablets. 6) Government support and Enterprise push is also happening. With the mind slightly inclined with the support, it is an excellent opportunity to pitch in with slightly better devices. This will result in people buying multiple devices because of the relatively smaller cost of the subsidized Government supported tablets. 7) Contract based selling will also boost further sales, particularly in high-end tablets. With proper customer profiling and efficient tracking methods, the service providers can provide devices on contract basis as done in the United states of America and other developed countries.

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CONCLUSIONS AND IMPLICATIONS

QUANTITATIVE & QUALITATIVE

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QUANTITATIVE: Tablets are the future and is known to almost everyone who has the exposure to Laptops, Internet or Smartphones. In India Apple and Samsung occupy 'Top-Of-Mind' branding, among the population. There are a majority of people who aspire for a tablet and will buy after taking few factors in consideration. People who own the tablet are mostly 'Galaxy Tab' owners from Samsung in all the age-groups , followed by Apple's 'i-pad'. Indian OEM's are also gaining ground. People who have bought have taken price and value into consideration. Among the people who have not bought, most of them are considering buying anytime soon. The top factors which will contribute in their purchase decision is price and battery life. Other features such as connectivity, storage is also an important factor in their buying behavior. Android takes the top share in terms of Operating System, people prefer or would prefer. It is mainly because of the variety of OEM's adopting the Google's OS into their devices. This is widely because of the open-ended OS of Android. Apple's i-OS is used in i-Pad's exclusively. Other OS have a very small market share in the market.
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Among the various age-group surveyed, The 21-25 and 26-31 age group has maximum users and aspirers. Low end tablets, enriched with consumption content attracts the younger generation in the 16-20 age group.

The age group over 20 years is mostly concerned with the viability of tablets in their work field, hence the office use criteria is mostly sought after, in tablets. Younger generation below 20 years is mostly concerned with the entertainment contents and 'coolness' of the device. Gaming and browsing are the main activities they seek.

The lower-tier price brackets, i.e. below Rs 5000 and between Rs 5000-Rs 10000 is mostly sought after by the people in the age group of 16-20,however the more serious buyers prefer the standard tablet anywhere between Rs 10000-Rs 20000. Tablets over Rs 35000 are Niche and belong to specific set of people.

The purchase decision in age group over 20 years is mostly done by the individual themselves, with occasionally getting help by their friends and colleagues. Age group below 20 years is reliant on their parents or elders who would shell out the money on their tablets.

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QUALITATIVE: The participants were well versed with the knowledge of the tablets hence they responded accordingly. To them tablets were important but the cost and value as compared to laptops is yet to be justified. With the advancement of technology, the gap will certainly narrow down, making tablets more acceptable to a huge masses. Introduction of low-tier tablets has and will increase the adoption rate along with the improvement in technology. Apple will definitely challenge the Indian counterparts with its introduction of ipad mini,as well as reducing the prices of its older generation i-pads. Content rich tablet, which pose a challenge to the existing laptops and desktops will be welcomed and will result in a faster adoption. Tablets coming with contract as in USA, will cut the initial high investment, resulting in higher sales of high-end tablets.

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BIBLOGRAPHY
www.Digitimes.com www.ibtimes.com www.gartner.com www.thetimesofindia.com www.ndtv.com/gadgets www.podcastingnews.com www.ibnlive.com www.samsung.com www.aaple.com Cyber media research reports Morgan Stanley reports CC Convergys analysts Google www.engadget.com

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APPENDICES
QUESTIONNAIRE FORMAT:

Questionnaire
1) Are you familiar with the "tablet Computer's or "tablets in general? YES 2) What Tablet Brands have you heard of? Apple/i-Pad Samsung galaxy tab Motorola xoom HCL X-series Lenovo Amazon/Kindle fire Micromax fun book Karbonn smart tab other's 3) Do you own a 'Tablet'? YES 4) If 'YES', then which brand do you use? NO YES YES YES YES YES YES YES YES YES NO NO NO NO NO NO NO NO NO NO

5) For what purpose did you buy the "tablet' for? Official usage Others, Please specify Entertainment popularity Future gadget Institutional obligation

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6) What made you buy the particular brand of tablet? Cost benefit screen size Brand Value Operating system battery life connectivity after sales

market place/applications. Others, Please specify

7) If 'NO', then why have you not bought/use the 'Tablet'? Expensive branded tablets value as compared to laptops restrictive capabilities connectivity issues uncertain future not enough choices battery life lesser looking to buy soon.

8) Which Operating system would you prefer in your tablet? i-OS Android Windows QNX(Blackberry) Others

9) What price 'bracket' seems adequate for your 'ideal' tablet? below 5000 25,000-30,000 5000-10,000 30,000-40,000 10,000-15,000 above 40,000 15,000-20,000 20,000-25,000

10) What 'Add-on' benefits you want to see in your tablet? Better screen resolution Better battery lighter weight Pen-input Insurance external detachable keyboard Better processor/Operating system

Better connectivity

11) Who makes the purchase decision in your family? Parents Spouse Friends Self colleagues

PERSONAL DETAILS: NAME AGE OCCUPATION CONTACT NUMBER ADDRESS

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ARTICLES:

Micromax tops tablet market in India: Research

Micromax leads India's tablet market with an 18.4% market share, followed by Samsung, which has a 13.3% share. MUMBAI: Sales of tablets in the country crossed half a million units in the second quarter ended June this year, led by Micromax, and followed by Samsung and Apple. This represented an increase of 59% quarter-on-quarter, and a year-on-year jump of 673%.

Increase in shipments is mainly due to entry of new tablet vendors, and introduction of offerings from existing vendors at low- tomedium price points.

According to CyberMedia Research, in the overall tablets market, Micromax led with 18.4% share, followed by Samsung at second position with 13.3%, and Apple at the third slot with 12.3%, in terms of sales (unit shipments) during the 2Q 2012. Though the tablets market here is still at a nascent stage but at the same time has become competitive due to entry of new vendors with entry level offerings. Close to 90 vendors launched their tablets till 2Q 2012.

The ASV (average sales value) of the tablets in 2Q 2012 has dropped to little above Rs 13,000 from Rs 26,000 in the first quarter, as a majority of vendors launched their products in the Rs 5,000-10,000 price range.

According to Faisal Kawoosa, lead analyst, CMR telecoms practice , "During 2Q 2012, 47.4% of tablet sales were from new entrants in the market with a strong focus on addressing application areas in the education and entertainment segments. This trend demonstrates clearly that vendors are positioning their devices at India's youth."

"Going forward we see vendors launching segment-specific tablets such as on healthcare, retail and e-governance. In terms of tablet use cases, the popular categories are internet browsing, email, entertainment, gaming, social networking, information (cricket, flights etc). Clearly, the Indian user is also taking to the tablet as a content consumption device," added Tarun Pathak, analyst, CMR telecoms practice.

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