Most of us are familiar with tablets. These portable devices with a touchscreen interface are popular among technology consumers. They offer people a user-friendly way to do simple tasks like browse the internet, play games, or read e-books.
They are also useful for business purposes. Since they are light and easy to carry, they are ideal for things like working remotely while traveling. Enterprise users may find tablets convenient for word processing, accessing business email, or cloud computing.
Most tablet users live in the United States. Their relatively high cost makes them more popular with wealthier households. The typical user is an upper middle class consumer. However, tablets are now more common in lower-income emerging market countries with growing middle class populations.
It’s widely reported that gender disparities are common in the tech world. And it’s true that males traditionally use consumer technology more often than women do. But it’s interesting to note that tablet use splits almost evenly between the two sexes. This suggests popular mass-market appeal.
What are people using them for? Here are the most popular tablet uses:
- Social networking
- Information and research
- Reading e-books
Of course, people like to be entertained and keep in touch with their loved ones. So it makes sense that people mainly use tablets to play video games and stay connected with their friends and family members via email and social media.
But it is interesting to note that tablets are increasingly being used to research and complete purchases online. For example, the list suggests that many people now use them to learn about and buy new products. They are also used to research vacations and book travel plans on the internet.
Tablet usage also tends to spike along with American television prime time, from 8 PM to 11 PM. This phenomenon means that tablet consumers like to multitask . . . using their devices while they are also watching TV.
The Future of the Tablet
More than 100 million were sold worldwide in 2012. Some predict that the tablet market will grow exponentially in the next decade. Piper Jaffray analysts predict that tablets will surpass notebook sales by 2015 and total PC sales before 2020.
As prices continue to drop and technology gets better, more people may take the plunge and buy their first tablets.
The explosive growth in tablets may benefit businesses and entrepreneurs as well. More tablet use will lead to profitable business opportunities for mobile advertisers, app developers, or any business that sells products and services to consumers online.
Investing in Tablets
So, how can investors take advantage? Investors may be able to profit from tablet market growth by investing in any of the following companies. Please note that as of this writing, I don’t own any of them. And I'm not necessarily endorsing them all as investments. But they may be worth doing some more research on if you are interested putting money into this area.
Apple — AAPL
Apple has a rabid and loyal following, both for its tablets and iPhones. Apple sells the bestselling tablet in the world. The iPad runs on the iOS operating system. Sixty-nine percent of all devices sold in 2012 were iPads.
Amazon — AMZN
The Kindle Fire by Amazon comes in a very distant second in sales behind the iPad. But the Kindle dominates the Android market and is popular with e-book readers. Despite that, keep in mind that Amazon has not been consistently profitable over the years.
Google — GOOG
Editor's Note: Google is now listed as Alphabet Inc.
Google doesn’t make tablets, but it makes the OS and it supplies apps to the hardware makers. Of course that could change. Google purchased Motorola so there is some speculation that they may begin making their own devices. Like I explored in last week's post, Google and hardware maker Samsung have an uneasy partnership that may not end well.
Best Buy — BBY
The electronics retailer now has its own Android tablet called the Insignia Flex. It gets mixed reviews . . . some say it's too pricey for what you get.
Samsung seems like an obvious addition to the list . . . so where’s the link? Well, Samsung does trade on the South Korean stock exchange. But they do not have ADRs. So it’s tough for North American investors to pick up shares . . . although it’s possible to buy them on the illiquid “grey market.”
For now, tablets are supplemental devices . . . meaning most people have a tablet in addition to other electronics. But it’s possible that tablets could replace PCs, laptops, and smartphones if trends play out as predicted. It seems likely that tablets will get wildly popular over the next several years.
The tablet market is fast moving; the technology behind these devices evolves every year. Investing in this area could potentially be profitable. But it’s important for investors to understand the risks and be prepared for volatility when putting money into tablets.
What are your thoughts on investing in tablets? Future trend or missed opportunity?