Market Insight

Tesco releases Hudl 2

October 16, 2014  | Subscribers Only

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Tesco, one of the world’s largest retailers, has launched its second tablet, the Hudl 2.

Hudl 2 features an 8.3-inch high definition display, upgraded sound from Dolby Audio, and an Intel quad-core processor. Additional features include:

  • A 1.2MP front camera and a 5MP back camera
  • Dual-band Wi-Fi with 2.4GHz and 5GHz speeds
  • 16GB of internal storage with the option of up to 32GB of storage with a micro SD card

The tablet runs on Android 4.4 and includes access to Googles App store.

Priced at £10 more than the original Hudl, the tablet sells for £129 ($206). Tesco is again offering promotional pricing for its loyalty system (Clubcard) members. Members will be able to use Clubcard vouchers to cut the retail cost to as low as £65.

Our analysis

Tesco sold 500,000 units of its first Hudl tablet, launched October 2013, within its first six months on the market compared to Amazon’s UK sales of just over 200,000 tablets in Q4 2013 and Q1 2014 combined. With changes in screen size, RAM, processor, and cameras, Tesco is looking to further differentiate its product from other bargain competitors.

More retailers are releasing their own tablets in an effort to be competitive in both the tablet and retail environment. Tesco is among a group of companies currently offering tablets within the 7.0 to 8.9-inch screen size, including UK retailers Argos and Aldi which offer 7.0-inch tablets priced lower than Tesco’s tablet, at £99 and £79.99 respectively, and US retail giant Walmart’s two 7.0-inch tablets, released in 2013, and priced at £61 and £92—the higher price device featuring enhanced cameras, memory, and screen resolution. Tesco’s strategy is to directly link online retail services into its devices which helps make shopping easier for consumers and is financially beneficial for companies. While the company is making strides toward this, by incorporating various Tesco apps, it could further integrate its retail services.

To further differentiate its product from other retailers, Tesco has preloaded Hudl with a variety of apps including Google’s collection of Maps, Play and TV, Camera, and Chrome. To better integrate the retail environment, Tesco has added a direct link to Tesco services like Clubcard points, offers on Blinkbox content, grocery deals, and information about Tesco stores. Additional folders on the home screen provide access to services such as Tesco Direct (online shopping), Bank, and Photo (photo printing). The bigger profit opportunity for Tesco is long term in the additional sales volume that the tablet may generate both online and in stores. Tesco is attempting to walk a very careful line with the Hudl 2, balancing product improvements against price considerations. Tesco’s tablet is competitive to other tablets offering a better display and software features. The company should see success with its second generation Hudl, particularly compared to other retailer tablets in the UK.  

 

Geography
UK
Organization
Amazon Tesco
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