Tab sales make PC makers quake

JAKARTA - In less than four years since the introduction of Apple's iPad - the commercially successful tablet that fired up the category - it is already unhinging personal computers (PCs), whose commercial versions have been around for five decades.

And the trend will only strengthen down the line as consumers in Indonesia become increasingly mobile, industry watchers have said.

Mindshare leader for business planning in Asia Pacific, Deepika Nikhilender, said that tablets had already "encroached into the personal computer market". "It is a scary phenomenon for PC manufacturers."

Mindshare is a global media network that provides services such as business planning.

Quoting a study by eMarketeer, Deepika pointed out that there was an estimated 6 million tablet owners in Indonesia this year but that number was predicted to explode to 16.2 million by 2017.

The latest study by the International Data Corporation (IDC) has also set off alarm bells for PCs.

The IDC reported that in the second quarter of the year, personal computer shipments in the country fell by 6.2 per cent quarter-on-quarter, albeit a 3.8 per cent year-on-year rise.

The firm's client devices market analyst, Deddie Sionader, said the decline was triggered not only by volatile exchange rates, but also "a continuous consumer shift to tablets".

He said prices of PCs had gone north when the rupiah weakened against the US dollar, causing demand to slump.

In the second quarter of the year, consumer notebooks touched a shipment volume of 820,000 units, lower than the 900,000 shipped in the previous quarter.

"The weaker currency exchange will cause retailers of PC products, such as notebooks and desktops, to have to ultimately increase their prices to sustain their businesses, which in the end is unfavorable to end users," he said.

Meanwhile, prices for tablets are heading south.

"Tablet demand is continuing to grow exponentially with their great product innovation and lower prices compared to PCs," Sionader added.

Local brands of Android tablets can cost as low as Rp 1 million (S$100).

PT Erajaya Swasembada spokesman Djatmiko Wardoyo, however, said that the demand for higher end tablets had been strong as well.

"Samsung devices carry higher prices, but the demand has never dipped," he said, adding that the widest price band for tablet sales was between Rp 5 million and Rp 7 million.

He further added that the convergence of technology - telephony, computation and camera - into one package drove the adoption of tablets.

"Tablets are the kind of devices that can roll all these functions into one package," he said.

According to Nikhilender, the price factor is just one of the aspects adding to the growing popularity of the tablet.

She pointed out that tablets had garnered the attention of consumers because the devices could perform many of the functions conducted on PCs, including email.

To boot, she said, tablets offered better portability than "clunky" personal computers.

She further added that as the trend rolled out, consumers were going to prefer more compact, smaller screen tablets.

"Smaller tablets and phablets are going to encroach on larger tablets," Nikhilender said.

She added that down the line, feature phone users would "leapfrog" directly to phablets, or tablet and smartphone hybrids with screens between 5 and 7 inches, as their smart device.

Smartfren, for example, has launched tablets with screens measuring 7 and 8 inches.

"This is why Indonesia is a very important market on a global scale, especially as prices become more affordable and mobile data rates come down," Nikhilender said.