Digital tablets, the latest craze in Brazil

Alexandrine Brami

Alexandrine Brami

Cofondatrice et CEO

Digital Factory Brazil

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April 22, 2014 1 comment

Brazil is becoming increasingly connected and quickly making up for lost time in adopting ICTs. As the digital sector forges ahead, touchscreen tablets are growing in popularity as a connectivity tool.

In Brazil the Information and Communication Technology (ICT) market, which comprises sales of ICT devices plus software and services, is showing strong growth. According to US-based market research, analysis and advisory firm IDC, this market should grow by 9.2% in 2014. In 2013, sector growth in that country was 9.5%, versus 4% worldwide. Brazil is now on course to become the world’s fourth largest IT market after the US, China and Japan.                                 

One striking observation is the spectacular penetration of digital tablets in Brazilian households. The tablet market has seen a real boom, posting a sales volume growth rate of 119% between 2012 and 2013. This year growth is forecast to slow, but is still expected to remain high, at around 35%. In 2014, it is estimated that 10.7 million tablets will be sold, compared with 8.4 million notebooks, pushing the tablet for the first time to the top of the list of digital devices sold in the land of the samba.

The attraction of novelty plus strong fiscal incentives

Growth in sales of this multimedia tool is first and foremost down to price. An increasing number of national brands – Positivo, DL, Estrela, Tectoy and Multilaser – are competing with the large international players – Apple, Samsung, Sem Toshiba, Motorola, and Panasonic – with low cost models priced at under $250 with a view to gaining market share quickly, especially among the emerging middle class.

The current craze has been fostered by the federal government, which has launched a vast plan to equip state schools with touchscreen tablets, and has substantially reduced tax duties on these devices in order to strengthen the country’s appeal in the eyes of electronic equipment manufacturers. The result is that Brazil has become a favourite assembly platform for tablet devices destined for the South American market.

Even iPads (and soon the iPad mini) are made locally at Foxconn plants located in the city of Jundiai. The city has recently named a main thoroughfare ‘Steve Jobs Avenue’ in homage to the founder of Apple. The major loser in the current trend is the PC, which is facing ever-greater competition from notebooks and tablets. In 2013, the portable computer was still the preferred IT tool in Brazil, with 8.2 million units sold, compared with 7.9 million tablets. From 2014 onwards, the rate of increase in sales of the portable devices is expected to slow again. It is interesting that the tablet often arrives in the hands of the Brazilian consumer as a complement to, rather than a substitute for the notebook, which is actually replacing older types of PC. In fact notebooks and tablets substantially overtook the number of office computers sold in 2013 (5.7 million). Sales of PCs are set to shrink even further in 2014, falling to 4.7 million units sold, predicts IDC.

Opportunities to be grasped in Brazil

The rapid spread of tablets as ‘must-have’ consumer items in Brazilian households is creating openings for all players, from startups to major companies providing specialised apps, videos and online games, plus online advertising etc. There are huge market opportunities, especially in the entertainment and education sectors, for equipping tablets with simplified interfaces and apps specially designed for children. São Paulo startup Atheva has developed the Kademi platform, importing into Brazil the French idea of study backup tools. Kademi is eyeing a market of 46 million children for its educational apps, 80% of whom attend state schools. Its main customers are both primary and secondary schools, which are now gearing up fast with technology.

Though drawing fewer media headlines, tablets are also being used increasingly in industrial sectors as well. Given that devices intended for the mass market are not always suited to rough use out in the field, some local suppliers have been specialising in developing robust mobile equipment which meets the requirements of such sectors as state security, health and the agribusiness. One example is manufacturing firm Maxtrack, which has furnished the São Paulo police force with extra-robust digital mini-tablets equipped with GPS. This enables police on the ground to obtain information updated in real time and to process data more efficiently.

The authorities of the states and cities which will be hosting the soccer World Cup matches in June are also busy equipping the main taxi firms with tablets and interactive apps. The idea is to provide tourists with clearer information and make it easier for them to interact with taxi drivers who have little English. In São Paulo alone, 3,500 taxis are due to have these devices installed this year. Comtecno, a technology firm based in the state of Bahia, was selected to develop the tool and provide information content in English and Spanish.

In Brazil, the power of the social networks is much talked about. However this is only one aspect of the Brazilian ICT scene. The passion for tablets and notebooks demonstrates the growing complementary desire on the part of Brazilians for smart hardware, which is creating opportunities in many sectors.

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