Apple iPad 2 May Mark Rise of Tablet Bubble Getting Ready to Burst

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 technology show in Germany, there were at least 39 companies showing tablets just at that single show. 

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 price pressure.  

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.