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Tablet Market Hopeless for All But Apple?

If you had an extra $500 and were convinced you needed to try a tablet, which one would you buy?  I bet that over 80% of you would pick the Apple iPad.  Apple already owns about 74% of the tablet market for 2011 according to market research firm IHS (www.ihs.com) .  The other tablet makers are not selling anywhere near what they would like to see despite the fact that feature-wise they are nearly on par with the iPad.  As I consider a tablet myself, I can’t help but wonder which one of the dozen or so other tablet makers will exit this nascent market because of the Apple dominance.

As you may have heard, Hewlett Packard (HP) recently announced they will probably be exiting the PC business because of its low margins.  Along with that announcement came word that they were abandoning their TouchPad tablet as well after a miserable initial showing the first six weeks or so of sales.    I didn’t get a chance to look at one of these tablets but HP makes nice stuff and I suspect it was quite good with its unique GUI based on the WebOS popularized by the Palm smartphones.  Yet, as HP found out in a very short time that the TouchPad just was not competitive with the entrenched iPad2.  I am beginning to think that this was a wise business decision.  Now, who will pull out next?

In considering a tablet, I can’t deny that the iPad is certainly the one to beat.  I have looked at the Motorola Xoom and the Samsung Galaxy 10.1 and both appear to be competitive.  The Xoom is a bit heavy but certainly does everything well once you get the feel of it.  The Galaxy is lighter and easy to use as well.  They do everything most people want to do like email, web browsing, social networking, video and gaming.  Just what is holding people back from buying these competitive models?

Clearly it seems that everyone wants to be a part of the Apple cachet and culture.  It is cool to have an iPad or iPhone.  The “mystique” is what people are buying.  And I suspect that most probably believe that Apple is going to be in this market for keeps unlike some of the others which could abandon this market in a flash.  Who wants a discontinued tablet?  And what about support or service?

Features do sell products and Apple has the most and best but the others are so close.  I cannot think of another Apple feature that stands out over the others.  Thinness and light weight may be the best one.  Number of available apps (90K+ and counting) is a big factor as well.

What can the competitors do to beat Apple?  Low price is a great way but Apple will play that game by keeping its older iPad and iPad2 model prices low when the new iPad3 comes out in early 2012.  Editor-in-Chief, Joe Desposito commented on the pricing aspects in his recent blog.  Take a look at http://electronicdesign.com/Blogs/JoeDespositosBlog/tabid/727/entryid/200/Tablet-Wars-Claim-First-Victim-HP-TouchPad.aspx .  

Making the cellular access models cheaper would also help but that means some deals with the carriers.  A larger screen may appeal to some but at some point above about 10-11 inches the product becomes too much of a handful to manage comfortably and battery life decreases.  Smaller, thinner and lighter is a better way to go but a screen size of no less than 7 inches.

More and better apps would also help, or just one or two really “killer” apps would do it.  A hot new game is would help.  A good source of video is another possibility.  Again deals with others.  I like the idea of over the air (OTA) TV from local broadcast stations.  We now have the Advanced Television Standards Committee-Mobile/Handset (ATSC-M/H) standard up and running and about 100 U.S. stations are now transmitting.  Adding an ATSC-M/H receiver and an antenna may really appeal to some.  I doubt 3D TV would be of any appeal to the general public.

There are still lots of questions about the tablet space and if Apple will continue its dominance.  For example, now that Google is buying Motorola Mobility, will it fix Xoom to be more competitive?  I bet new models are in the works.  And will Microsoft or Nokia get a tablet and if so can it be competitive?  Will RIM stay in the game?  Will Amazon really get into this market?  Will some new niches (education, etc.) be found for the smaller players?  If so, what? 

In its latest release, IHS also predicts that Apple’s tablet share will drop from 74% in 2011to 43.6% in 2015.  That is certainly hopeful for Apple’s competitors but I am not sure I believe it.  Unless the tablet competitors come up with something new, different or better, I see Apple just continuing to overwhelmingly dominate this market.

As for me, I decided to get a new laptop instead.  The cost of a low end unit is about the price of an entry level tablet and I can type on it.  Otherwise it does everything else a tablet does.  The main downside is size and weight and the lack of that coolness factor.  And because of HP’s announcement, I probably will not get an HP laptop.

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