Tesco Plc (TSCO), the U.K.’s largest retailer, will start selling a cut-price tablet loaded with its own shopping applications next week as it takes on the likes of Amazon.com Inc. (AMZN:US) and Apple Inc. in the digital space.
The 7-inch (17.5-centimeter) high-definition tablet called Hudl will sell for 119 pounds ($191) in Tesco stores and be available to members of the retailer’s Clubcard loyalty program for as little as 60 pounds in vouchers.
Only a quarter of U.K. households own a tablet and many customers feel they are too expensive, Tesco Chief Executive Officer Philip Clarke said at the unveiling of the new device in London today. Apple’s (AAPL:US) iPad with similar specifications sells for about 320 pounds and Amazon’s Kindle Fire HD for about 160 pounds. The market for tablets will grow 37 percent this year after 140 percent last year, consultant e-marketer estimates.
Tesco’s device is “not expected to single handedly move the revenue or profit dial any time soon or ever,” Clive Black, an analyst at Shore Capital in Liverpool, said in a note. If it is well received, “it may contribute to what is clearly a hard-earned, but only very steady self-improvement program.”
Tesco has to become a technology company as well as a retailer as it seeks to revive its flagging domestic business, Clarke said earlier this year. The grocer, which has lost market share to discounters like Aldi and Lidl as well as upscale competitors such as Waitrose over the past decade, plans to spend about $750 million on digital services this year.
Hudl gives full access to the Internet and has a dedicated button for Tesco’s online shopping and banking as well as the retailer’s Blinkbox digital movie and music streaming services.
Tesco executives declined to comment on how much it cost to develop the tablet, how many they expect to sell over the key Christmas period and how much profit the product could make.
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