Jeff Gelles: Crowded tablet market looks like start of PC era

TOMOHIRO OHSUMI / Bloomberg
TOMOHIRO OHSUMI / Bloomberg
Posted: September 15, 2011

When personal computers were new, tech-savvy early adopters faced a dizzying array of choices. Companies such as Apple, Atari, and Tandy each developed not just their own hardware but their own operating systems, and no one knew how the market would shake out. Remember a company named Microsoft? It wasn't even incorporated until 1981.

Today's tablet-computer marketplace bears some resemblance to that confusing era, as manufacturers and operating systems compete for attention. It's a realm where Apple's iPad dominates, Hewlett-Packard jumps out of the market with its TouchPad but then jumps back in - sort of - 11 days later, and BlackBerry introduces a PlayBook tablet that lacks, of all things, a built-in e-mail program.

Although most Americans now use the Internet and nearly six in 10 own a laptop, just 8 percent reported owning a tablet and 12 percent an e-book reader, according to a spring 2011 survey by the Pew Research Center.

Are we in the early stages of a tablet explosion, or are they destined just to build a solid niche between smartphones and netbooks? No one knows for sure, despite Apple's huge success in selling nearly 29 million iPads in the product's first 15 months - evidence that Pew's recent data are already understated.

To get a better handle on the tablet landscape, I spoke with Sascha Segan, the lead analyst for mobile devices at PC Magazine, which has covered personal computing since 1982.

Segan, too, sees parallels to the start of the PC era.

"We are so early in the tablet market that we're not even sure what the tablet market is," Segan told me. "This is a category that is really being created right now. There are a lot of rough edges, and there's going to be a lot of debate."

PC Magazine defines tablets as any computer with at least a 7-inch or larger display that is chiefly controlled by a touch screen - a definition that includes some of the e-book readers, such as Barnes & Noble's Nook Color, that have begun to revolutionize book sales.

At the other end of the size spectrum are tablets with screens that measure about 10 inches diagonally - a group that includes high-end, $500-plus models such as Apple's 9.7-inch iPad and Motorola Mobility's 10.1-inch Xoom, a tablet based on Google's Android operating system that was plucked from relative obscurity last month, when Google announced plans to buy Motorola. The category also includes the Arnova 10 G2, an Android tablet being offered by The Inquirer's parent company, Philadelphia Media Network, in a package with three discounted Inquirer and Daily News apps for $298 for a one-year subscription and $359 for a two-year subscription.

Here are some guideposts to help if you decide to go tablet hunting:

At the high end, Apple rules. Tech developers have imagined tablets at least as long as there have been personal computers. Much like Dick Tracy's wrist radio, or the 23d-century flip-phone "communicators" designed for the 1960s Star Trek series, tablets were a format waiting for technology to catch up.

That finally happened last year, two decades after Apple flopped with its first try at a tablet, the Newton.

Segan said the iPad epitomized what consumers want in a 10-inch tablet. It's light and portable, but big enough for reading a book, magazine, or newspaper. It has a sharp, high-resolution display for viewing video or movies, with low-enough power consumption to last for a transcontinental flight. And it has a touch screen with a virtual keyboard suitable for typing an e-mail or short document.

It didn't hurt that Apple's success with the iPhone gave it a huge head start in fostering the development of apps, the specialized programs that make smartphones and tablets especially appealing.

Price matters. So far, the iPad has left its high-end competitors in the dust.

For example, Segan said, HP's TouchPad was a perfectly good $500 tablet, but it only started selling when HP decided to exit the market and marked it down to as little as $99 to empty its inventory. That prompted HP to restart production, but only long enough to clear out leftover parts, he said.

"It proved that if you put the price low enough for a good tablet, people will flock to it," Segan said.

Android tablets. The busiest Android tablet market centers on smaller, 7-inch models, largely because Apple doesn't offer one, Segan said.

"A lot of companies are trying to find the secret sauce that appeals to people," he said. Some are using Android 2.3, also known as Gingerbread, an operating system Google says works for smartphones or tablets. More expensive versions use a slightly newer platform, known as Android 3.1 or Honeycomb, developed expressly for tablets.

PC Magazine's favorite 7-incher is Acer's Iconia Tab A100, a Honeycomb tablet that sells for $330 to $350. Segan said Honeycomb's advantage is that it makes better use of the tablet-size screen. On the other hand, it requires more powerful hardware, pushing up prices.

If analysts' expectations come true, Amazon will unveil a 7-inch Android tablet this fall, perhaps followed by a 10-inch version. Amazon's market strength could upend the tablet market.

"There are a lot of companies that want a piece of this market," Segan said, and "right now they're all experimenting and trying to get it right."


Contact columnist Jeff Gelles

at 215-854-2776 or jgelles@phillynews.com.

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