Retail Picks Up Tablet PC Biz Sales

By Doug Olenick -- TWICE, 5/19/2003

New York — Pointing to the strong initial sales of Tablet PCs at retail, vendors say the new portable computer should have a long life on store shelves, despite the fact that it is primarily being bought by SO/HO and small business customers.

Viewsonic said it shipped every Tablet PC it had between the Nov. 7 launch date and the end of the year. Toshiba painted an even brighter picture saying its entire inventory at CompUSA was snapped up on the first day of sales, said Craig Marking, Toshiba's senior product marketing manager. Toshiba has increased its production levels twice during this period to keep up with demand, he said.

A majority of these sales went through retailers, with small businesses making the lion's share of the purchases.

Dan Coffman, ViewSonic's senior product manager, said sales have flattened a bit, but attributed this to a fall-off in consumer purchases as many realized the devices are better used in business environments. The slow-down is not expected to be long-lived as many small businesses are gearing up to make IT purchases, he said.

"Now the small businesses are buying it and others are testing the tablets prior to placing orders," Coffman said, adding that at some point these companies will start making purchases and sales will head back up.

Tablet PCs became available at retail early last November. According to the research firm Gartner Dataquest, 35,544 units shipped into the U.S. market with 69,467 units shipping worldwide during November and December, the most recent numbers available to Gartner.

Microsoft's Bill Gates, an originator of the Tablet PC concept, envisioned the Tablet PC as a home and business device enabling people to move seamlessly about any wirelessly networked office or home. And according to preliminary customer research conducted by the vendors, this is how the devices are being utilized, particularly by people who take their work Tablet PC home to do additional work.

Vendors said the Tablet PC's high-profile launch at Comdex/Fall and follow-up promotional efforts at CES, both of which included upbeat testimonials from industry luminaries like Gates, generated a great deal of consumer and commercial interest.

Manufacturers agree that the Tablet PC is not likely to become a primary household computer any time soon, but there is a possibility it could give some competition to notebook computers in some areas. But again, this will take place in the business, and not consumer, space.

Toshiba's Portege Tablet PCs were designed to be effective ultra-portable computers first, and Tablet PCs second, so they would appeal to the widest possible audience, Marking said. Paul Torres, Gateway's Tablet PC product manager expects to see Tablet PC functionality brought into the notebook computer format. These could include touch screens and the ability to convert into a Tablet PC by having a removable pen-enabled monitor.

Viewsonic has just introduced a Tablet PC bundle that combines the device with a keyboard and docking station for $1,999, Coffman said. This should make the devices attractive to consumers, although all the vendors said mass consumer acceptance is still far in the future.