News Analysis: There could be as many as 100 new tablets launched this year, leading at the least to confusion and price pressure in the marketplace. Can the collapse be far behind?
When Apple's iPad 2 launches on March 11, it'll be the
beginning of a huge growth in the tablet market. At the recent CeBIT
there were at least 39 companies showing tablets just at that single
Many of these companies were showing more
than one type of tablet
. Asus, for example, had four distinct tablets aimed
at different segments of the market. Acer had three. While many companies were
bringing just a single tablet of one kind or another to the market, it's also a
sure thing that there were plenty of tablet vendors that weren't at CeBIT,
including both Apple and Motorola, maker of the new Xoom tablet.
While nobody has a firm handle on just how many tablets
will actually reach store shelves this year, it's safe to suggest that there
will perhaps be as many as 100. Now, that's a lot of tablets, considering that
these devices have really only been on the market for little more than a year.
So what will be the result of a market where there are 100
tablets being offered for sale? The first thing you'll see is a lot of
attrition. Not all of those tablets will be good enough to make it in the real
world. With this level of competition, a tablet will need to be really good to
make it in the marketplace.
The second thing you'll see is price stabilization. While
Motorola is offering its Xoom for about $800, it's safe to predict that it won't
stay at that price when the other tablets, including the iPad 2, are being sold
for less. While Apple may be able to maintain its prices, the pressure to
reduce prices will be strong, since there will be dozens of other well-made,
feature-filled tablets available.
Price pressure will particularly affect the Android
tablet market, if only because there will be so many essentially identical
devices on the market. Buyers will be reduced to choosing their Android tablets
by price, and a number of the companies making those devices won't survive the
Ultimately, there will be a bloodbath among Android
tablet makers. While the winnowing won't affect Apple directly and probably won't
affect Windows tablets because there is less competition, it still won't be a
pretty sight. Manufacturers will find it to be a tough market if only because
the price competition and feature growth will spill over.