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Tablet Runner-Up Still Undecided

2/21/2011 12:01:00 AM Eastern

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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