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iPads and Other Tablets to Fight for Market Share

25 Aug 2010

In a posting by Chuck McCullagh on the Magazine Publishers of America website he discusses the "Tablet Wars".

A recent research report by Rider Research, "The iPad Comes of Age," suggests a very fast maturation curve when we are a still early in the tablet game and it's hard to argue with the numbers. Forecasters now expect 46 million tablets to be sold by 2014, though at this posting the number seems on the low side.

The Rider Research is largely a compilation of analyst reports and industry data and opinions. So it is suggestive rather than definitive. There seems to be a consensus that in the early stages the iPad is hurting everything, especially netbooks and low-cost notebooks. Kathryn Huberty, Morgan Stanley analyst, observed that 17 per cent of iPad buyers are buying this product rather than a handheld video game player; 28 per cent instead of an e-book reader; and 41 per cent instead of an iPod touch. The disruption could be even deeper. Huberty suggests that 27 per cent of iPad purchases are being made instead of buying a desktop PC, and 44 per cent instead of a laptop.

Perhaps these early reports are most troubling for the Kindle that has already responded to the iPad with deep price cuts. A senior analyst at Needham & Co. observes that the Kindle is not a compelling product when compared to the iPad. This view, however, is not universal. Other reports indicate that 40 per cent of consumers who own or plan to buy an e-reader also plan to buy an iPad in 2010. So it's early.

The Rider Research lists eighteen companies that are known or rumoured to be developing a tablet and concludes: "The big question that every potential tablet maker has to answer is how it will compete against the more than 200,000 apps that run on the iPad." Apple uses the same operating system on the iPod touch, iPhone, and iPad. This is an enormous advantage for Apple and its third-party developers.

The Rider report is useful and necessarily uneven given the fast-changing device and content eco-systems. One thing is certain: Apple had a huge first-mover advantage and other tablet manufacturers face the same hurdles other faced when coming late to the e-reader wars. The Consumer Electronics Show last January was littered with dozens of e-readers that never made it to market.

Source: Magazine Publishers of America


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