Tablets: Another BRIC in the Wall

December 19, 2011


Somewhere in Moscow, a Russian university student is checking into Starbucks on Foursquare. Demand for and investment in mobile value added services (MVAS) is growing in BRIC nations (Brazil, Russia, India and China) though current usage of these services is highly concentrated in urban areas.


MVAS includes digital broadcasting services, social networks and the like.  Brazil, for example, is working with credit card companies to facilitate mobile transactions in hospitals. Emerging nations are increasingly looking to government for funding to lay down the infrastructure needed to implement mobile strategies in the health and education industries, as well as to bring mobile technology to rural areas.


India recently announced the creation of a low-cost tablet for students.  However these technologies have not, and cannot yet, penetrate the Indian diaspora, Computer Business Review reports, "the Indian telecom industry is weakened by limited data service adoption due to a large prepaid subscriber base, low wireless Internet penetration and a lack of 3G enabled smartphones." That said, these are not by any means permanent barriers. India has a large youth population and is expected to surpass China as the world's most populous country by 2030. Early investment in MVAS will make countries like India fertile territory for mobile manufacturers and content providers in the very near future.


These trends have not gone unnoticed by tech manufacturers. The widespread adoption of tablets in established markets has forced the industry to pivot. Manufacturers are diversifying in a number of ways. Companies like Intel, Hewlett-Packard, and Lenovo are shifting more resources to the tablet market while developing strategies to sell PCs overseas.


While the focus has been on the tablet wars being waged in more mature markets, a shadow civil war is being waged overseas. Will consumers leapfrog PCs and go straight to tablets? A 2011 Accenture report regarding a survey it conducted suggests that this may well be the case for a number of reasons.


 According to the report, "Counter to common misperceptions, a large segment of BRIC consumers are more interested in the newest and most innovative technologies than in the lower price point technologies with less functionality." This interest has changed the purchase intent of consumers in these areas – only 17% of survey respondents planned to buy a PC.


Smartphone ownership is also on the rise in BRIC countries. The survey also found that about 32% of respondents currently own the devices.  Currently, overseas consumers are opting to use multiple mobile devices as replacements for PCs. There is significant demographic and usage information to suggest that these users will skip the PC incubation phase and become tablet users. However, price barriers and broadband penetration levels suggest that widespread tablet adoption will begin in public sectors rather than with individual early adopting consumers as it did in more mature markets.