Tablet Runner-Up Still Undecided

By Doug Olenick On Feb 21 2011 - 6:01am




SAN FRANCISCO — The puzzle that is the tablet PC category will remain largely unfinished in 2011, with Apple’s iPad being the only piece solidly in place.

This situation is expected despite the entry of computer heavyweight Hewlett-Packard into the tablet PC mix last week, according to industry analysts.

“I think we need the rest of the year to sort out the No. 2 company. I expect everyone to have product ready to go by the back-to-school period and that is when it will get interesting,” said Stephen Baker, industry analysis VP for The NPD Group.

Richard Shim, DisplaySearch’s senior analyst, PC group, does not see any company rising to challenge Apple in 2011, but he is predicting a major shakeout will take place among the many vendors now in the field.

“I expect about 70 percent of those who announced products will make it through the year,” he said.

Shim would put his neck out slightly and predict the three leading contenders so far to control the category are the iPad, HP TouchPad and Motorola’s Xoom.

Hewlett-Packard last week became the latest player to enter the tablet PC arena when it introduced the HP Palm TouchPad. The TouchPad will be available this summer, with the company initially shipping the Wi-Fi version; 3G and 4G models will follow at an undesignated date. Pricing was not revealed.

The tablet PC market in 2011 is slated to ship anywhere between 22 million and 55 million units, depending upon which research firm’s data is viewed.

The tablet PC market could be something brand-new to the CE industry. For the first time there is a strong convergence of the computer and cellular markets, with consumers having to choose whether to go with a Wi-Fi tablet, 4G version or one encompassing both technologies. This will also lead to a battle between carrier stores and traditional CE retailers, Baker said.

“There are a lot of moving parts here that we haven’t seen before,” he said.

Shim added that the carriers could play a major role in any price war that develops.

“The variable is what will the carriers do. Lowering the price on plans could change the market,” he said.

Shim also offered up an idea that consumers could bypass getting a data plan for their tablet by using a smartphone with a built-in Wi-Fi hotspot as their Internet conduit. This “tethering” is already happening with notebooks, and the fact that Wi-Fi tablets have been the preferred choice so far indicates the same will hold true for these devices.

The tablet market is also creating a new situation on the processor and operating system fronts.

Nvidia and Arm now dominate the processor side of the equation, with Intel so far bringing up the rear, said Baker, “a situation that company cannot be happy with.”

HP and RIM with the WebOS and Blackberry OS are going to have a tough time maintaining their relevance in a marketplace controlled by the Apple iOS and Android.

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