A tablet world away: Where Samsung and Apple lose out to brands you've never heard of
You might not have heard of Allview, E-Boda or Evolio, but they're Apple and Samsung's fiercest competitors in the Eastern European country of Romania. Here, local brands manage to sell twice as many devices as the tablet giants combined, and are now setting their sights on conquering new markets.
Worldwide, Apple's iPads lead global sales, accounting for around one third of the tablet market. In Romania, however, Apple had a humble four per cent share last year, while Samsung was in pole position with 15.6 percent, somewhat below its worldwide share, according to IDC Romania.
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During the same period, Allview had a whopping 14.8 percent market share, while E-Boda stood at 12 percent, and Evolio reached 10.4 percent. The analyst house estimates that the numbers will remain pretty much the same this year, with the trio leading the more established companies by a significant margin.
At the end of the second quarter of this year, Allview had a market share of 13.9 percent in Romania, E-Boda garnered 12 percent, and Evolio's name was on 9.8 percent of the devices, IDC told ZDNet. The three have sold 250,000 tablets in total during the first half of this year, the same number that were sold during the entirety of 2013.
However, in terms of revenue, "Samsung and Apple have a larger contribution to the value of the market compared to local brands who have high volumes, but low value," Sorina Campeanu, research analyst at IDC Romania, told ZDNet.com.
The discrepancies between Romania and the global statistics is significant. Worldwide, Apple was leading with 33.8 market share in the fourth quarter of last year, followed by its Korean rival Samsung with 18.8 percent.
How they do it
Local brands' portfolios consist not only of tablets, but also of dual-SIM smartphones, ebook readers, multimedia devices, and laptops.
Romanian brands' marketing strategy is straightforward. "The tendency is to offer the lowest possible price and to launch new tablets every quarter," the IDC analyst says. "The consumer market is focused on price and this is why local brands retain an important market share."
The three local companies, who put their names on white label Chinese products, have helped the tablet became available to the masses in Romania. They offer mainly Android devices at an average price of $135, according to IDC, while their most affordable tablets are less than $60, a price Apple or Samsung cannot, or will not, compete with.
Romainans would have to work for three weeks to be able to afford the cheapest iPad, sold through official channels this October at around $375. The average monthly pay in the country was $486 in August, according to The National Institute of Statistics.
"Our mission always was to allow all Romanians access to technology, regardless of their budget," Alexandru Dragoiu, CEO at E-Boda, told ZDNet. "Our public includes consumers living in large cities, as well as in towns and rural areas, who have limited budget and don't need the highest possible specs." The company is focused on selling seven-inch to 7.85-inch Android tablets at prices ranging between $70 and $230.
Not only has the company found the right price for the region, but the right moment as well. "When Romanian brands entered the tablet market, the prestigious brands didn't offer mid-range and low-priced devices," Liviu Nistoran, CEO of Evolio, told ZDNet. "Romanian brands such as Evolio occupied a segment of the market where there was demand, but offers were scarce, if not non-existent."
Local brands focused first on the low-end tablets, and gradually moved to the mid-range. Then, they started aiming high. "We try to offer products with unique features. Evolio X8 was, at launch, the thinnest tablet available on the local market; X7 was the first tablet with security software preinstalled; X6 was the first octa-core smartphone in Romania," Nistoran says.
Allview is ambitious and plans to take advantage of what it perceives as the weaknesses of Apple and Samsung in Romania. Dorin Gaman, COO of Visual Fun, the company behind Allview tablets, told ZDNet that local brands are more flexible and have a better understanding of the local market than the worldwide tablet giants.
Now, the locals try to offer both low-cost devices and high specs. "Consumers' perception changed a great deal," Gaman said. "Our portfolio now includes high-end devices [with specs] similar to those of the established brands, at an affordable price."
Number one in Allview's tablet sales both in Romania and abroad is the AX4 Nano, priced at $101. It's a seven-inch, 800x480p device, powered by a Cortex A7 1,3GHz dual-core CPU. It offers 512MB of RAM, 4GB memory, wi-fi, 3G, GPS, Bluetooth and Android 4.2 Jelly Bean.
Evolio tops the bill with X7, a seven-inch IPS 1280x800p tablet with a 1.3GHz quad-core processor, 1GB of RAM and 8GB of memory. It runs Android 4.2 Jelly Bean and comes with Norton Mobile Security package preinstalled. The price is $139.
Sociologist Marian-Gabriel Hancean, lecturer at the University of Bucharest, believes the rise of the local brands is not an effect of a romantic tendency to support Romanian products, but rather a pragmatic choice dictated by costs. "Their success has nothing to do with some sort of highly-developed patriotism," he says. "Before the recession, bank loans generated a significant increase in the purchases of foreign products. I doubt people became patriots in such a short period of time."
Romanian brands plan to expand
Local brands have been growing rapidly in the past three years but there is still room for improvement. "The Romanian market started to develop later than Western Europe and the B2B tablet market is still small. However, we expect steady growth," IDC's Campeanu says.
Romanian brands have high hopes for the following year. E-Boda is looking to consolidate its position both in Romania and abroad, and Allview plans to expand its Android and Windows tablets lines. Meanwhile Evolio is about to schedule the launch of its first device running Windows and wants to bring its products to other European markets.
Evolio sells more than 10 percent of its products in Bulgaria, Germany, and Hungary, according to its CEO, and is constantly monitoring foreign markets for possible expansion.
So does Allview. Nine percent of its turnover already relies on business abroad. "We've recently opened a subsidiary in Poland and we plan to reach other foreign markets in EU and outside the EU," Allview's Gaman told ZDNet. Allview's products can now be found in 12 countries outside Romania, including Germany, Greece, Holland, Slovakia, and Spain.
Despite their enthusiasm, Romanian brands are unlikely to have an easy time of it. More and more Chinese companies have entered the market with low prices and equally ambitious plans. What's more, many consumers have already used their first tablet and will become more demanding while searching for the next one.
Online stores are already seeing these trends. "We try to offer our customers quality products. We try not to sell cheap tablets, because of the high return rate. However, people dictate the offer, so we also have tablets priced at $60 to $90, but we don't promote them. They represent five percent of our tablet sales," Dan Dumitrescu, general manager of retailer Oktal.ro, told ZDNet.
Worldwide, small brands are gaining more and more market share at the expense of Apple and Samsung, according to IDC. The giants still manage to lead the tablet industry, but the analyst house announced an all-time high market share of 44.4 percent for the companies outside the top five. "We are seeing growth amongst the smaller vendors and a levelling of shares across more vendors as the market enters a new phase," said Jitesh Ubrani, research analyst for IDC's Worldwide Quarterly Tablet Tracker.