What will the market be like for non-iPad tablet suppliers?
Tim Coakley, Ingram Micro Consumer Electronics:
IMCE expects continued steady growth in the noniPad tablet category. In anticipation of the expected high fourth-quarter demand, current inventories will meet buying needs and margins will hold steady in this popular category.
Bill Stewart, Petra Industries:
As manufacturers are still stabilizing their price points, it is possible that demand will outweigh supply. To help with this issue, we work closely with our customers and our manufacturers to provide accurate forecasting that allows us to keep the right products on hand so retailers can count on us for just-in-time inventory, and we can maintain our 99.8 percent fill rate as we approach peak season.
Margins on hardware are generally lower than on the accessories. That is why it is imperative that retailers and e-tailers have a diverse product offering of the top add-on options for tablets — docks, cases, headphones, keyboards and so on. Accessories are the key to maximizing the potential that these tablets bring to dealers.
Jerry Satoren, DSI Systems:
The market for non-iPad suppliers will be a mixed bag. The high level of promoting that Samsung is creating around its Galaxy devices is forcing consumers to take a serious look at Android’s Honeycomb OS. And because many consumers are familiar and comfortable with Android smartphones, I believe that the brands that offer a quality first-tier device that operates on Honeycomb will be able to finally take a more significant piece of the market.
Additionally, if any of these tier-one brands can manage to hit a sub-$300 price point for a fully featured model, this will open the door to a much more significant market impact. It is also my opinion that any device that is not Android or iOS based will have a very difficult time creating much market impact this year.
There will probably be more than enough inventory in the non-iPad world to meet demand. As for margin, no there won’t be enough margin for retailers. The margin model for tablets is more like PCs than TVs. Helping margin in the tablet category is attachment. Since this is a first-time purchase for most consumers, very few get sold without a decent “basket” of very profitable accessories. For the retailers that get this right, the margin opportunity in this category looks a lot brighter.
Fred Towns, New Age Electronics:
More and more, the consumer is educated on the other tablet options outside of the iPad. There will be adequate inventories to meet customer demand. Retailers have to sell the complete solution to make sure their margins are sufficient. Consumers will have a lot of Android offerings that are more sophisticated, provide great results, and offer similar accessibility and experience as the iPad.
Eddie Lageyre, SED International:
This market will be competitive. HP’s Touchpad put a damper on backto- school tablet sales at the tail end, but we expect the business to rebound aggressively with new technology and new pricing opportunities in Q4. We don’t see a shortage of available inventory, ensuring the proper pricing and marketing strategy will be key to driving sales.
Will there be enough margins? In a word, yes! Non-iPad suppliers must adhere to proper channel margins if they want to execute and drive business this holiday season. This is the season for them to establish relevancy as we dive into 2012 and the Windows 8 hype we’re already hearing in the channel.
Jeff Kussard, Capitol Sales:
While it is clear that iOS will continue to dominate the tablet market, lower price points and better margins will help make alternatives attractive to a larger segment of consumers. With all the changes and next-gen models expected from the various players, we don’t expect supply to be an issue.
Warren Chaiken, Almo:
Apple owns such a substantial portion of this channel that the market for non-iPad suppliers will be challenging. Inventory from tier-one manufacturers will be tight, but there looks to be plenty of inventory available from tier-two and tier-three brands. Strategic forecasting by retailers and distributors will be critical from an inventory perspective. Since margin on tablets will be tight, the solution for retail success is to bundle them with higher margin accessories such as cases, headphones and keyboards.
Jeff Davis, D&H Distributing:
Sales could be spotty (for non-iPad tablets). These suppliers will have to be promotional. It’s obvious now that you can’t come out with a product at the same price as an iPad and expect to win if you can’t offer the same feature set. We feel that the impact of the $99 tablet has flushed through its course in the market, so we will see an uptick in purchases. And iPad accessories will continue to perform well. We feel inventory will hold up in many of the key areas of opportunity, although we are hearing about some challenges due to glass restraints.
Dennis Holzer, PowerHouse Alliance:
I think the market for tablets will be strong for all manufacturers. While iPad will still dominate by far, competitors also will have strong sales and get their share because of lower price points. iPad inventories will be tight, which will also support other manufacturers’ business for last- minute shoppers who don’t want to wait when iPads are sold out.
In the late fourth quarter you will also see inventories on all other brands begin to tighten. Retailers have been forced and now programmed to accept lower margins and this will be no different. Nobody likes it, but they will accept it if they want store traffic and the opportunity to increase sales.