Tablets Make Inroads In Tough PC Market

By Doug Olenick On Jan 30 2012 - 6:01am




LAS VEGAS - When Android-based tablet PC vendors describe their experience in the category to date, the two most commonly heard adjectives are tough and challenging.

No little part of this stomach-churning angst is generated by the company based in Cupertino, Calif., that has dominated the category like King Kong did to New York City from the top of the Empire State Building.

Apple's presence - combined with a flood of tablets into, and many out of, the category - created a swarm of products vendors had to contend with just to get their markets on store shelves for most of 2011. The tide rose even further when Amazon and Barnes & Noble fully entered the fray with lowpriced tablets in the late fall, just in time for the holiday selling season.

"Tablets have been a roller-coaster ride with peaks and valley. It has been more of a challenge than anticipated - there is lots of competition," said Eric Ackerson, Acer's senior product marketing brand manager.

ViewSonic's Michael Holstein, business development VP, agreed. He said the higher end of the market is a tough place to play right now, and that ViewSonic has had much more success with its value- product line, which is priced in the $299 range.

And this situation will not only remain in 2012, but will probably grow more intense as additional players enter the field.

The trick for all the vendors this year will be proper product positioning and doing their best to gain mindshare from Apple and Amazon.

While the non-Apple players have not totally thrown in the towel when it comes to competing with the iPad, all recognized the fact that consumers with enough money to buy an iPad will do so over that of another device.

“If they have $599 or $699, they are going to buy an iPad,” said one manufacturer who requested anonymity.

On the flip side, companies have welcomed the introduction of the $199 Kindle Fire and $249 Nook Tablet. The general thought is these lower-priced, high-profile products will expose millions of people to tablets who might otherwise bypass the category due to the high entry-price.

Pandigital falls into this camp.

Jason Topel, marketing and product development VP for Pandigital, said that while the Fire does bring additional competition to the market, it is also a great eyeopener for the general public.

“We were always compared to the iPad, but with the Fire and other entries, people are realizing its Apple, and another world — Android,” Topel said.

This thought was proven true. In early December Amazon released its top-selling holiday products to date and the Pandigital 7-inch tablet was No. 2 for the computer category. Amazon’s figures did not include sales of its own products, however.

Acer’s Ackerson agreed, stating that the Fire has invigorated the category with the lower price, making the tablet more accessible to the average consumer.

Companies like Acer and others are viewing these Fire and Nook Tablet as gateway sales that could lead, down the road, to consumers eventually wanting either a second or larger device.

“Acer offers a different experience. The buyer is not locked into an operating system with our device and still has access to the Kindle store and e-reading app,” Ackerson said.

With tablets, both of the Apple and non-Apple persuasion, now firmly in consumer’s minds, the market is getting ready for 2012 to be different from last year.

The number of one-off models from relatively unknown companies will be more limited, unlike last year when 30-plus tablets were on display at International CES, said Topel. This will greatly benefit everyone, he said, as these tended to not only disappoint consumers, but retailers, as well.

Another area that proved to make the tablet category challenging for its charter members was Google.

While Google’s Android operating system powers the majority of the non-Apple tablets, the search engine’s development strategy has left many vendors hot under the collar.

“While different Android versions helped in allowing many types and services, the way they work by limiting the initial release to a few partners and always releasing it around Christmas makes it hard,” Holstein said.

“While Texas Instruments OMAP will have it all, the others will have to wait, and this forces customers to wait before making a purchase,” he added.

Google’s Ice Cream Sandwich version of Android has been given to developers and is expected to be fully released during the first quarter of 2012. Initially vendors believed their models using Honeycomb and even older Android 2.3 operating system could be automatically updated to Ice Cream Sandwich, but now some are backing off that claim, stating the end user may have to directly connect their tablet to a PC for the upgrade to take effect.

However, the manufacturers are looking forward to the new OS as it will help unify the various tablet and smartphone products.

Although even further down the road, ViewSonic is starting to get excited over the release of Microsoft’s Windows 8 operating system. Windows 8 is Microsoft’s first attempt at delivering an OS created from scratch to work with touchscreens.

This is of particularly interest to ViewSonic, Holstein said, as his company is already producing tablets for vertical and enterprise markets that have are dual bootable to Android and Windows.

How much pressure Windows 8 can potentially place on Android is unknown at this time. The main drawback to Windows 8 is the Android markets huge assortment of apps. However, Holstein said an Android App Player is being developed by several companies, such as Bluestacks, that will effectively allow Android apps to be played in a Windows environment. In much the same way there is an Adobe Flash app.

If Windows does find additional traction in the consumer tablet space, it will open up the door for Intel to start making inroads against all the Arm architecture processors by Nvidia and Texas Instruments.

Holsein said Intel is working on altering the power management technology on its chips to closely mirror Arm. If this is accomplished, it would make Intel more competitive as one of Arm’s great advantages over Intel is its battery life, Holstein said.

Other improvements expected on tablets coming out in 2012 are improved panel resolution, better design and materials, and the ability to better directly connect with other Wi-Fi enabled devices.

The first of these upgrades is already projected to take place in 2012.

The tablet PC category will gain higher-resolution displays in 2012, according to NPD DisplaySearch.

DisplaySearch is predicting tablet display resolution will increase by 78 pixels per inch (ppi), going from 134 ppi in November 2011 to 212 ppi the following year.

The ability to pass content between devices will also become important as more tablets appear in homes and families gain the need to quickly and easily move video and photos about.

Pricing is not expected to decline greatly, although more vendors will target the $199 price point.

“$199 is the magical price and we are working hard to get there,” said Ackerson.

Otherwise, from a cost perspective, nobody is seeing a great deal of downward shift, particularly for the largerscreen models.

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