Retailers Bundle to Kick-Start Tablet Sales

The global obsession with tablets continues, fuelled by the incredible success of the iPad. In the meantime, rival manufacturers, desperate to capitalise on this new category, are facing up to the reality of the “tablet market”, which to date has been little more than a “market that sells iPads”.

The UK’s still the test-bed for retailers backed into a corner as they desperately try to get consumers interested in rival devices. Apple’s sharply priced iPad has made this an even more daunting task. All those rival tablets are obliged to take their pricing cues from the market leader. And in my opinion, even matching the iPad’s pricing, which is the path RIM and HP have taken with the PlayBook and the TouchPad, is going to be a struggle.

oranges_applesIn a move that’s likely to increase Apple’s dominance of this market, Orange recently upped the ante by offering the iPad 2 and the iPhone 4 in a £99 bundle. Although the deal’s tied to a £65-a-month contract, it’s bound to have captured people’s imagination.

As RIM’s BlackBerry PlayBook arrives in the UK, other tablet bundles are emerging. Phones 4u’s offer was the first one to catch my eye. It promises a free BlackBerry PlayBook and a Curve 9300 for £37 a month on a two-year contract. This is certainly far more attractive than the stand-alone price of £399 offered elsewhere.

As soon as Phones 4u’s deal appeared, Carphone Warehouse responded with an eye-catching advert offering a “free tablet and free smartphone” from £16.50 a month. The advert shows a range of seven-inch tablets: the Archos 7, BlackBerry PlayBook, HTC Flyer and Samsung Galaxy Tab, which come bundled with the BlackBerry Curve, HTC Wildfire S or Samsung’s Galaxy Apollo. The advert has few other details, and a quick look at Carphone Warehouse’s Web site adds to the confusion, as it’s hard to even find the £16.50 deal. In fact, closer inspection reveals the bundle can cost as much as £51 a month for HTC’s Flyer and Wildfire S.

cpw tablet bundle

There’s no doubt this kind of promotion will attract customers, but I always worry that headline-grabbing deals for such a nascent category risk alienating buyers. When they delve further into the offer and find a high-specification product such as the Flyer or PlayBook is over double the monthly cost of the entry-level bundle of an Archos 7 and a Galaxy Apollo, there’s a high risk they’ll be disappointed.

Of course, both Carphone Warehouse and Phones 4u should be applauded for trying to give the iPad some competition, even if all the signs are that Apple’s device looks set to dominate in the near future. We’ll be tracking this closely in coming months, especially as part of our new Tablet VU service, which includes actual tablet sell-through data tracked against several metrics. Over the next few months we expect to real evidence of whether the new bundling strategy is working.