The future of the tablet computer
Not written in stone
The iPad is a success, but other tablets may not be
Jun 3rd 2010 | From The Economist print edition
THE iPad, Apple’s latest gadget, seems to have lived up to its maker’s lofty expectations: 2m of them have been sold in two months, with more presumably to follow after the device’s debut outside America on May 28th. But will the iPad’s success trigger explosive growth for other sorts of “tablet” computers, a category that had previously been seen a sideshow, much as the iPhone did for smart-phones?
The answer appears to be yes, if the proliferation of tablets at Computex, a trade show held this week in Taiwan, is anything to judge by. The exhibition floor was teeming with prototypes, especially from Taiwanese firms such as Acer and Asustek. Dell, an American rival, had unveiled its offering, Streak, a few days earlier. Even Google and One Laptop per Child, a charity, have tablets in the works.
Yet the flurry of activity is deceptive. Not all the computer-makers rushing to produce tablets are convinced they will be a huge success; they are simply hedging their bets after their failure, in many cases, to predict the popularity of netbooks (no-frills laptops), which shot to success in 2008. Tellingly, most of the new devices will not hit the stores before the end of the year, if not later.
It is still unclear what people will use tablets for, says Jeff Orr of ABI Research. They are unlikely to edge out established devices such as televisions, personal computers, games consoles and smart-phones. Most buyers so far have been habitual early-adopters of new gadgets. But tablets may find a niche, he believes, as portable video players and magazine racks.
Much will depend on price. The cheapest iPad costs $499. For tablets to become a mass-market product like DVD players, analysts reckon, the price must fall to $100 at most. Some iPad clones are to be sold at this level, but they lack many of its most attractive features. Fancier tablets could become cheaper, however, if mobile-telecoms operators were to subsidise them, as they do with handsets.
This points to another barrier. To maximise their usefulness, tablets need a fast wireless-internet connection. But so far only a third of American households have Wi-Fi, reckons ABI Research. And mobile-data services are not getting cheaper, at least for heavy users. On June 2nd AT&T ditched its all-you-can-eat plan for iPads, which cost $30 a month, and replaced it with tiered rates.
What is more, tablets are less about hardware than about the software and services that run on them. Users of iPads can already download more than 5,000 applications from Apple’s online store. Such variety is a distant prospect for owners of tablets powered by other operating systems, such as Google’s Android. Yet the more competition there is among operating systems and devices, the more common tablets are likely to become.
Some of the most muscular players in the industry are still in the locker room. Hewlett-Packard is said to have killed the Slate, which was to be based on Microsoft’s Windows, and is now reportedly working on a tablet using an operating system from Palm, the smart-phone maker that HP recently bought. Microsoft will certainly re-enter the fray, although none of its operating systems seems a good fit for tablets. Nokia, too, has yet to unveil its plans.
ABI Research thinks only 8m will be sold worldwide this year and that they will not become a mass-market device before the middle of the decade, by which time it foresees annual sales of 57m. Even this would be less than the number of netbooks expected to be sold this year. And it is not even a third of the global market for smart-phones in 2009.
But tablets may still have a big impact, argues Carolina Milanesi of Gartner, another research firm. Television-makers, for instance, may introduce more interactive features and computer-makers launch app stores in response. All very gratifying for tablet manufacturers, no doubt, but not exactly a money-spinner.