Home >Industry >Phablets, and not tablets, are raking in more revenue than PCs in India

Mumbai: Till even three years back, most consumers would have been unfamiliar with the term phablet. And even today, many users may not know phablets by that name but only as smartphones with big screens, between five and seven inches.

Regardless, the fact remains that sales of phablets in India rose over five times in the full financial year ended 31 March while revenue more than quadrupled, contributing significantly to the $15.87 billion Indian information and communications (ICT) hardware market in 2014-15.

Phablet sales touched 50.8 million units as on 31 March from 8.1 million a units year ago, while revenue jumped to 25,410.40 crore from 4,050 crore a year earlier, according to a study by hardware lobby MAIT and the Indian Market Research Bureau (IMRB) released on 17 July.

The phablet segment also emerged as the second-largest revenue earner for handset makers, next only to that of smartphones that sold 69.67 million units in 2014-15, up 33% from 52.43 million units a year earlier. Revenue from smartphones touched 38,316.90 crore, again a 33% growth from 28,838.50 crore a year ago.

The Indian ICT hardware market itself, according to the report, grew 23.98% over a year ago. The segment includes personal computers (PCs), desktops, phablets, tablets (screen size greater than, or equal to, 7 inches), smartphones, servers and peripherals.

PC sales, comprising desktop computers and notebooks, stood at 10.62 million units, predictably registering a 10% fall in sales over a year ago. The reason: The onslaught of smartphones and phablets. Desktop revenue, too, fell 4% from 7,673.90 crore from 8,021.90 crore over the same period, while notebooks fetched 12% lower revenue at 13,384.20 crore from 17,095.70 crore a year ago.

The growth of tablets, however, was muted in the same period at mere 4%. Tablet sales in 2014-15 stood at 3.48 million units, compared with 3.35 million units in 2013-14, “which indicates the decline of the category even before it established itself", according to the MAIT-IMRB report.

Revenue from this category, too, is not impressive: 2,088.50 crore, up just 4% from 2,011.50 a year ago.

According to a 7 May note by research firm Counterpoint, the Indian tablet market declined 5% sequentially during January-March.

One reason for the fall in growth of tablets, according to Counterpoint’s research director Peter Richardson, is that consumers who wanted a tablet already own one and the replacement rates have been slower than expected. “However, we believe the demand in enterprise segments (example, retail and hospitality) and niche consumer segments (example, seniors market) will continue to offset some of the lacklustre consumer segment demand," he said in the note.

According to Anwar Shirpurwala, executive director of MAIT, it’s the bigger screen of phablets that “make it an extremely desirable product as it bridges the gap of a multi-utility device and an entertainment device. However, it is only up to the 5.5-in screen phablets that have found acceptance".

The scenario is no different globally.

In a note released on 3 September 2014, research firm International Data Corp. forecast that phablet sales would touch 175 million units worldwide in 2014, passing the 170 million portable PCs expected to ship during the same period. The report added that total phablet volumes will top 318 million units, surpassing the 233 million tablets forecast to ship in 2015.

As the smart connected device market matures, and emerging markets drive more of the growth, the percentage of the market made up of phablets plus regular smartphones is expected to increase, the note said.

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