China’s tablet market is seeing significant growth. In the third quarter alone, 2.6 million tablets were sold. That’s an astounding 62.5 per cent year-over-year increase from only 1.6 million in the same quarter in 2011.
Even more impressive is how dominant Apple is in this market. The iPad took home 71.4 per cent of sales, and China’s own Lenovo is in a distant second place with 10.5 per cent. 2.6 million tablets from the world’s biggest country doesn’t seem like a big deal, but the speed at which sales are growing is worth noting.
Okay, China is quickly headed towards 1.5 billion people. So, why does such a relatively small number of tablets matter? It’s all about the ever-growing middle class with disposable income.
In 2004, the average income in China was less than 4,500 yuan. Account for inflation, and that equates to around £550. There is a huge difference in average salary in rural and urban areas, though. For example, if you remove the huge rural population, the average salary in 2004 jumps up to 7,947 yuan. When you take into consideration China’s substantial GDP growth rate, you can see that there is an untapped market of people that can’t afford luxuries like tablets just yet, but will be able to in the coming decade or two. This news about the booming tablet market becomes a lot more interesting when you realise that this is just the tip of the iceberg.
Last year, Forbes published a wonderful piece that estimated that the Chinese middle class will outnumber the American middle class four times over in just a single generation. It’s plain to see that China’s amazing economic engine is a force to be reckoned with. Just last month, it came to light that China already makes up 15 per cent of Apple’s revenue. These latest stats about tablets beginning to take off in China just bolster the idea that China is quickly becoming the place to be for businesses.
Apple has seen the potential that China has, and it is being rewarded with market share – not to mention millions of bucks. If Apple keeps up its focus on China, the idea that low-cost and cruddy electronics are the only way to make money in the Chinese market will disappear quickly. As larger amounts of disposable income becomes a reality for more Chinese citizens, the world of tablets and smartphones is in for some major disruption.
Ignore or mock the 2.6 million tablets sold this past quarter if you want, but you’ll be missing the point. China is where business and technology is heading, and companies like Apple know that developing countries like China, India, and Brazil are where the big money is going to be in a hummingbird’s heartbeat.