Apple's (NASDAQ:AAPL) iPad HD (or iPad 3?) launch March 7 is stirring up tablet talk mania to a fever pitch, so it's only fitting that Forrester Research is ratcheting up its guidance for tablet unit shipments through 2016.
The researcher said it expects 112.5 million U.S. adults to have a tablet by 2016, up from 82.1 million in its earlier forecast. Part of the 30 million-plus unit bump in Forrester's estimations can certainly be attributed to the category-defining iPad.
However, the popularity of the Google (NASDAQ:GOOG) Android-based Amazon Kindle Fire tablet and Barnes & Noble Nook Tablet helped expand the addressable market by costing less than half that of the iPad, explained Forrester analyst Sarah Rotman Epps in a blog post.
Apple's cheapest iPad 2, for example, costs $499. Amazon launched its Kindle Fire last November for $199, selling somewhere between 4 million and 6 million units. The Nook Tablet, which launched at $249, also now costs $199.
Why have these Android tablets succeeded while premium Android tablets from Samsung, HTC and Motorola Mobility have seen lackluster sales? After all, those tablets are priced around the $500 to $700 mark of the iPad models, with varying storage.
First, the low cost of the Kindle Fire and Nook Tablet lured users who couldn't or were reluctant to shell out $500 or more for another media-enabling device.
Second, Epps said her data showed that many consumers didn't think they needed tablets they weren't sure what they could do with; the premium Android tablets lack the expansive content ecosystem that comes with the iPad, Kindle Fire and Nook Tablet.
"It's about the serviceswhat you can do with the device, which is why Apple, Amazon and B&N have succeeded in the US where pure hardware plays have failed," Epps wrote.
Apple appears to be not just maintaining but expanding its current lead. U.S. buyers accounted for only 43 percent of the 55 million iPads Apple sold through the fourth quarter.
That leaves plenty of prospective buyers for the company to target with the iPad HD, which will be unveiled in San Francisco March 7. The device is expected to possess a higher-resolution screen, faster processor and could be equipped with a 4G Long-Term Evolution (LTE) radio.
Google meanwhile is expected to combat the iPad train's momentum with its own tablet, possibly a Nexus-branded slate, later this year. Details on the device are vague, but Android creator Andy Rubin has acknowledged Google must "double down" on Android devices this year to aggressively court consumers.
Forrester's Epps said Apple should counter the Kindle Fire and Nook Tablet with a low-cost slate of its own. Amazon, in turn, should take Apple head on by licensing its platform to other hardware OEMs.
In another interesting gamble, the analyst argued that Android OEMs Samsung, HTC, Toshiba and Lenovo should consider jettisoning Android tablet development for Windows 8 machines in the U.S.
This prospect almost makes sense when one considers that the Windows 8 Metro user interface looks pretty slick on a tablet, even compared with the latest Android 4.0, or Ice Cream Sandwich, build.