After many investigative research works in the major Nigerian cities of Lagos, Kano, Abuja, Port Harcourt, Kaduna, Onitsha and Ibadan, we report that Nigerian tablet market is huge. It is very huge – but it will take time. It will take time because the people are not tech savvy. They want to buy the tablets but operating them is a challenge to many, especially the traders. You must convince them why they have to buy a smaller device when with the same money they can get a big laptop!. It is the whole idea that bigger is better. Unfortunately, the business of tablet is built on portability triumphs size in most cases – otherwise we should be carrying our desktops around.

We noted that many people do not understand what to do with tablets since it does not do your typical computer jobs. Oh Yes, it cannot run Word and Excel. The question? Why not buy a laptop. However, with the penetration of the gizmo in the nation, more and more people are beginning to understand what tablets can do. And that is the opportunity. We noticed that when MTN came into the game, it created a nice awareness.

That said – we estimate that 220,000 units of tablets will be sold in Nigeria in 2011. In 2010, the total number of tablets sold was less than 70,000 units. Etisalat and Starcomms ruled last year and we estimate that Starcomms sold more. What hurts Etisalat is that Galaxy Tab is very premium and priced out of the rich of many Nigerians. The local players of Ovim and Inye completed the rest.

In 2011, MTN with the Huawei made tablet will rule the market. Starcomms will move to the third spot because Glo will overtake it. We do not see Etisalat dominating this market with N100,000+ tablet. MTN is moderately priced at N81,000 and being a GSM network has the capacity to dominate. We put Glo ahead of Airtel because Glo has shown that it wants market share over margins in most of its pricings. Our prediction is that MTN and Glo will sell more than 40% of all tablets sold in Nigeria in 2011.  The local players will account for about 5% unless they improve their promotions and advertising naira. This 5% can move to 15%  if they can differentiate with contents and that is having locally themed Appstore.

By August, we expect 13 locally branded tablets in Nigeria. There will be many un-branded ones that would be sold or hawked in Ikeja junctions and elsewhere. They will join Ovim, Inye and DroidPad. At the mass market, tablet business will become commoditized. It will be sold as a laptop.  The premium on brand will become difficult because of price war. And many local players will be hurt. Why? Differentiation will be key and cost will not matter much. By the end of Feb 2012, many local players will leave the sector. The ones that will remain must demonstrate the capacity to innovate on top of the hardware. This business of hardware will disappear but another business ecosystem will emerge and that is CONTENT.

CONTENT is the only way the local players can survive since price war will put everyone in razor thin margins. If Airtel pushes MTN, they will lower price and Glo will follow and all of a sudden, the price differentiation will vaporize. The only people that will win customers will be those that provide contents. This means that the strategy for winning this sector is bringing more people to develop for you. It will go beyond having Android Store and equivalents to having localized stores in the nation.

We continue to see no traction on Apple products in Nigeria. We do not think iPad will do well here. There is nothing to show that cultic fellowship it enjoys in most parts of the world. One reason is the middleman problem since Apple does not directly sell these products in Nigeria. Today, the most expensive tablet in Nigeria is iPad and they are sold by computer IT vendors with no branding of the contents. It is just hardware and the solutions space is not communicated.

We continue to watch Visafone. This company that recently acquired Multilinks could be very competitive. It is local and can compete. The challenge will be – do they want to get into tablet in a large scale?

Generally, we want to know what your comments are – about the state of Tablet in the nation. We think it is huge, but it will take time. Another report will be published next week on the Mobile OS market in Nigeria.

Author: Tekedia Intelligence

Editor’s Note: A more detailed and academic research will be published this July in FasReport.