Handy guide to tablet warriors | High price helps iPad
In just eight months, Apple has managed to create one of the computer world’s fastest-growing and most lucrative sub markets. And the competitors are getting tired of Steve Jobs and Co. hogging the spotlight.
Launched in April 2010, the iPad has quickly come to define tablet computing. Consumers have snatched it up, with 2010 sales expected to total between 15 million and 19.5 million units. With prices ranging from $499 to $829, the iPad is a huge breadwinner for the company; Apple can’t keep up with demand.
Competitors see those supply problems, along with the iPad’s high price, as a weakness — and a chance to begin building their own market share. And they’re ready to pounce.
Samsung’s Galaxy Tab has been the most aggressive so far. But waiting in the wings are devices from Research in Motion (makers of the BlackBerry smartphone), Toshiba, Asus and HP.
One of the more popular approaches from the newcomers has been downsizing the tablet to make it more pocket-friendly. The Galaxy Tab, for instance, sports a 7-inch screen, versus the iPad’s 9.7-inch screen.
It’s a strategy that hasn’t earned a lot of respect from Steve Jobs.
“The current crop of 7-inch tablets are going to be DOA, dead on arrival,” he said during an October conference call with analysts. “Their manufacturers will learn the painful lesson that their tablets are too small.”
The early sales numbers on the Galaxy Tab refute that somewhat. Samsung has sold 1 million of the devices worldwide in the first two months on shelves. That’s certainly much lower than the 7.5 million iPads that have been sold, but it’s not insignificant.
Still industry observers say Jobs, despite his bluster and obvious bias, makes a good point.
“There are enough other factors out there happening … that it’s easy to point to the screen as the culprit as to why (competitive) products aren’t moving,” says Rhoda Alexander, director of monitor research for iSuppli. “I would point to the screen as a culprit as to why those products aren’t moving. The form factor is too close to what you have on the mobile phone. There’s not enough difference to distinguish the tablet from the smart phone.”
BlackBerry, HP challengers
The player to watch in this market is actually Research in Motion. The company’s forthcoming Playbook could present the most credible threat to the iPad, given the BlackBerry manufacturer’s close ties with corporate
RIM announced the tablet in late September and is expected to unveil launch details, including carriers and pricing information, at CES.
Another to keep an eye on is HP’s upcoming device, currently code-named “Topaz.” This webOS tablet (which will likely carry the name PalmPad upon release) may be released in conjunction with Microsoft and reportedly has a screen size that is comparable to the iPad. Again, details are expected at CES.
Competitors have lambasted the iPad for several feature flaws, but one of the most common targets is the screen’s dimensions. Rather than favoring the 16:9 ratio required for true HD viewing, Apple chose to go with the standard 4:3 width. The Dell Streak and Galaxy Tab both touted their wider screen as being optimized for media content.
But as it turns out, that seemingly old-fashioned screen shape might be the iPad’s secret weapon. 16:9 might be ideal for video, you see, but it’s less so for eBooks, games or functionality programs.
“When you think about the Holy Grail for tablets, you think of something that can replace written devices so you can go paperless,” Alexander says. “If you think about written environments — whether it’s a writing tablet or a book or a magazine — the format is 4:3. So, to the end user, when they have a 4:3 device in their hands, it’s a very comfortable switch. And for the content makers, that’s a familiar shape.”
That’s not to say that Apple’s grip
on the market is unshakable. The iPad may have effectively launched tablet computers into the mainstream world, but as new competitors hit the market — and seek out different audiences — the Cupertino-based company could see its lead diminish.
iSuppli estimates that the iPad will have an astonishing 88.4% share of the media tablet market at the end of 2010. By 2014, though, that’s predicted to fall to just 48.7%.
The decline will come as competitors build out their app offerings and continually undercut Apple on price. The biggest transformation they’ll make, though, will be in the operating systems of their tablets. Currently, there isn’t a real competitor to the iOS. The version of Android that’s being used isn’t optimized for tablets; nor is Windows 7.
That will start to change in 2011, though, as Android’s Honeycomb rolls out and RIM shows its proprietary tablet-based OS with the Playbook.
2011 is expected to be a boom year for tablets, with total units jumping from 15.6 million to 57.3 million, according to iSuppli. Apple will release a second-generation iPad and possibly even a third before the year is out, in order to maintain its position. And competitors are ready for the fight.
“I have a list of 80-plus tablets that have been announced, and many of these will see the light of day at the 2011 CES,” says Shawn Dubravac, chief economist and director of research for the Consumer Electronics Assn. “With competition heating up, each and every aspect of differentiation will be on the table: OS, screen size, color and available applications.”
And it’s not just the usual consumer electronics suspects who are hoping to get in the fight either. The range of companies that are exploring the tablet space give an indication of just how tough a fight Apple is in for.
“This isn’t a fad,” said Nvidia CEO Jen-Hsun Huang during a November conference call. “Everybody’s building tablets because it’s just so important. Car companies are working on tablets. Consumer electronics companies are working on tablets. Computer companies are working on tablets. And communications companies are working on tablets. The medical industry is working on tablets. I don’t remember in the history of computing (when) a singular device is being worked on by all of the industry.”