TWICE:
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.
