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The Apple Tablet’s Role in Emerging Markets

Posted By Jon On January 28, 2010 @ 9:42 am In Industry News | 5 Comments


At a little more than double the price of the One Laptop Per Child’s XO-1 and equal in price to nearly every decent netbook on the market, the Apple Tablet has been announced and it’s entry level price is only $499. It’s certainly cheaper than most full fledged laptops making it a not-so-luxury choice for Mac fans across Africa.


Principal Analyst Julien Blin of JBB Research feels differently [1]:

While Apple is set to experience strong success in developed markets such as North America, Western Europe, and Japan, it is likely to have almost zero impact on emerging markets like South America, Africa, and even parts of Asia like China. Content issues, IP (intellectual property) issues, lack of 3G/WiFi support, and pricing issues due to the large proportion of low income customers, are set to remain key hurdles for Apple in this region to drive the adoption of its new flagship product.

I disagree, actually. The Apple iPad at $499 is already at the same price point of many netbooks sold here in Uganda. (I’ve seen $200 ASUS EEPC’s sold at the equivalent of six hundred dollars here!) So even if a base price of $500 is marked up to $800 in a country like this, it’s still $200 dollars less than the last Acer or Dell laptop I purchased here. Those computers were both crap, defective after the first few months of use. And much like Apple, most Dell parts are simply hard to get in Africa.

So the cost is pair with what the African middle class is consuming in terms of laptops these days. And it’s portable which mobile natives will appreciate. As the price of bandwidth falls [2], African consumers are becoming more and more ‘connected’ and eager to consume digital content. It’s a mistake to assume that because a Ugandan or Malawian teen can’t access the iTunes store that they won’t want an iphone, or will be bored due to lack of content. Any geek will tell you the fact that the device has a wifi connection is more than enough to load it it with the content of your choosing.

Plus, in a year or two, Apple will release a new iPad (they always do) and the prices of old models will be undercut slightly (a pattern they’ve maintained for three years now with iPods and iPhones). Prices won’t necessarily fall in countries like Uganda as a result, but it will mean more product is available on the aftermarket for resellers, and if the demand is there, these products will find homes easily.

Apple Well Poised to Enter the BOP

The only real hinderance is the bottleneck of distribution. There are only a few authorized Apple retailers and repair stores on the continent, but most of their stock comes from distributors in the UK (As far as I can tell). This makes markup prices rather ridiculous in some cases. That’s a serious hurdle, but one that could be overcome if Apple decides to offer a more reasonable method of distribution to Africa. For South American and continental Asia, there are closer first-teir suppliers (in North America, Korea and Japan respectively).

As far as features, the fact that Apple has embraced a natively unlocked 3G device is huge. It means any of their partner carriers around the globe can be offered the device in their market as a premium item. This might take a year or two but it happened with the iPhone so I’d expect the iPad to follow.

I don’t know about elsewhere in Africa, but in Uganda people love the ‘exclusive’ brands. It’s a status symbol among a burgeoning group of young professionals like everywhere else in the world. Brand recognition of Apple amongst computer users in Africa is high. Yes, it’s a luxury item, but a good sign of a growing middle class is the growing consumption of luxury items.

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[1] feels differently: http://www.jbbresearch.com/board//bbs/board.php?bo_table=NOTES&wr_id=83

[2] As the price of bandwidth falls: http://appfrica.net/blog/2009/11/13/infostate-of-africa/

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