Tablet Vendors Battle for Supremacy in Saturated CEE Tablet Market

Tablet and 2-in-1 shipments in Central and Eastern Europe (CEE) declined by more than 20% in the first quarter of 2015 compared to the same quarter in 2014, according to the Europe, the Middle East and Africa (EMEA) Quarterly Tablet Tracker published by International Data Corporation (IDC).

Key factors in the expected market downturn were the negative economic situations in Russia and Ukraine and the strength of the U.S. dollar relative to the depreciation of their local currencies. In total, 2.7 million devices were shipped to the channels in the first three months of this year.

Other factors that negatively impacted the CEE tablet market included the growing maturity of the market, which is reflected in longer device life-cycles, and the popularity of alternative devices such as large-screen smartphones.

“Although the CEE tablet market is reaching saturation, segments with growth potential still exist – such as detachable 2-in-1s and devices with fourth-generation mobile connectivity and increased storage and battery life,” says Ji?í Teršel, senior research analyst for the tablet market with IDC CEMA.

Cellular-enabled tablets are outgrowing the rest of the market, providing an additional revenue stream for OEMs and mobile operators. They also help position the segment as true mobile solutions rather than stay-at-home devices.

IDC believes tablet OEM’s should continue to focus on potential growth areas like the aforementioned cellular-ready tablets and 2-in-1 devices. The commercial segment remains an area to watch for both form factors, as uptake among consumers is expected to increase in EMEA regions less affected by the downturn in the Russian and Ukraine markets.

Tablet Vendor Highlights

Samsung regained its market leading position in 1Q15 after several consecutive quarters. The vendor shipped 640,000 devices and strengthened its market share by 2.2 percentage points year on year to account for 20.8% of the total CEE tablet market.

Lenovo continued to pursue a market penetration strategy with competitive pricing and high value-for-money offers, although some of the vendor’s year-on-year growth is the result of a low base in 1Q14.

Apple continued on a downward slope in both total shipments and market share owing to the cannibalization of its tablet sales from its iPhone product line. The U.S. dollar appreciation in the EMEA region also negatively impacted the vendor’s sales, as price-sensitive customers steered towards cheaper and older iPad variants. However, the decline in ASP was partially offset by an increased mix of iPads with higher storage capacity.

ASUS launched its new Transformer lineup in mid-February to compete against ultra-portables and high-end tablets. Though these models didn’t become widely available in CEE markets in 1Q15, they represent the increasing popularity of in 2-in-1 form factor and its long-term growth potential.

Despite competing more aggressively in term of pricing than other vendors in 1Q15, Prestigio did not manage to outperform the top market players. On the other hand, the vendor focused more on x86 architecture and the Windows platform and was thus able to partially offset the margin pressures created by declining Android shipments.

“In the latter months of the year, some vendors (particularly the smaller ones) will not be able to sustain their revenue flows, due to increasing competitiveness in the lower-tier segment and increasing market concentration in the upper-tier segment,” notes Teršel. “They will thus be faced with a decision: to either consolidate or exit the market.”

Top Five Tablet and 2-in-1 Vendors, Shipments, Market Share, and Growth, Q1 2015