The survey results, conducted by Analysys Mason, highlighted that usage of tablets varies widely by region. However, we observed some common trends, particularly when looking at the opportunities for cellular connectivity on tablets – 47% of respondents had a tablet with cellular connectivity, but only half of them actually used that capability. We identified the following three key factors that affect cellular connectivity attachment rates on tablets.
Wi-Fi satisfies the connectivity needs of most tablet users. 45% of respondents with a 3G/4G-capable tablet who did not use this capability stated that Wi-Fi availability was the main reason for not enabling a SIM in their device. Tablets are mostly used at home, at work and in public places, where Wi-Fi is commonplace, particularly in developed markets. Wi-Fi is also used while on the move via smartphone tethering.
The price of cellular connectivity is not declining as fast as the average retail price of tablets. This has increased the percentage of the total cost of ownership (TCO) that is attributed to service charges. For example, the TCO over 12 months for the LTE version of Amazon’s Kindle Fire HDX with a 5GB monthly data plan on AT&T is four times higher than the cost of a Wi-Fi-only Amazon Kindle Fire HDX, because of the high data charges.
There is a direct link between mobility and the use of 3G/4G on tablets. However, some countries fall outside this correlation, particularly in the Middle East, where mobility is high but connectivity is low; and in South Africa, where mobile data connectivity is often used as a replacement for fixed services.
43% of tablet users did not buy the tablet that they use
Operators need to effectively use retail channels to promote and educate customers about their services and offers directly at the point of sale. For example, understanding ownership trends in terms of replacement cycles is critical for synchronising operator marketing strategies with actual tablet demand from new and current tablet users. However, a fundamental difference between purchase behaviour for tablets and smartphones is the impact that gifting or sharing has on their distribution and access. Overall, 43% of survey respondents did not originally buy the tablet that they used – 39% were acquired from a family member or a friend, who had either given it as a gift or who was simply lending or sharing the tablet.
16% of respondents indicated that the tablet that they used did not belong to them. Among those, 60% of the devices belonged to a family member, most likely living in the same household, and 26% belonged to an employer.
Family members accounted for a significant majority – 79% – of tablets given as gifts.
Replacement rates for tablets are relatively long, particularly in the most mature markets. According to the survey results, 49% of tablet owners in the USA and 46% in the UK expect to keep their tablet for more than two years. Tablet users that do not own the device they use may therefore present a better target sales demographic than existing tablet users during the 2013 holiday season, particularly in countries where tablet adoption growth has significantly slowed down, potentially showing early signs of market saturation.