Apple, HP Moves Suggest Tablet War Heating Up

Apple made its iPad available for preorder March 12, effectively kicking off the long-brewing battle between various manufacturers over the newborn segment for mass-consumer tablet PCs. HP has already been firing broadsides at the iPad for its lack of Adobe Flash support, and competitors in the space have all indicated a willingness to speed for the bottom in terms of pricing. Meanwhile, e-readers have been adding PC-like features such as mobile applications, adding another competitive wrinkle to the situation.

Apple made the iPad available for preorder March 12, three weeks before the tablet PC is due to be released. With that announcement, the tablet PC mass-consumer segment kicks into higher gear, as the much-hyped devices are readying to hit the market after months of anticipation.

Apple faces competition on two fronts. By giving the iPad a robust e-reader application, it places itself in direct competition against's Kindle, Barnes & Noble's Nook and e-readers produced by smaller manufacturers. As a tablet PC, the iPad will be competing by the end of 2010 with similar offerings from Hewlett-Packard and other companies.

How those battle lines are drawn, and who manages to eke out the few points of market share necessary to earn massive profits, is starting to become clear. One of the more prominent lines at this early stage, oddly enough, is Adobe Flash.

Apple has made the decision to shun Flash support for the iPad, as it did for the iPhone, on CEO Steve Jobs' reported rationalization that the application is excessively buggy. But Flash is nonetheless used to power rich media on several popular Websites, and a number of competitors immediately seized on that fact as a way to differentiate their own tablets.

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"With this slate product, you're getting a full Web browsing experience in the palm of your hand. No watered-down Internet, no sacrifices," Phil McKinney, HP's vice president and chief technology officer for the Personal Systems Group, wrote in a March 8 posting on the company's Voodoo Blog about HP's upcoming tablet. "A big bonus for the slate product is that, being based off Windows 7, it offers full Adobe support." HP's device, like the Apple iPad, will include the ability to e-read, Web surf and play media such as movies.

Jobs dismissing Flash has the potential to backfire, Charles King, an analyst with Pund-IT Research, wrote in a March 10 research note.

"To us, Jobs' comments seemed like little more than exasperated misdirection in the cause of excusing certain iPad deficiencies," King wrote. "No matter what one thinks of Flash, it seems odd to close the iPad, a device designed largely for media consumption, to some of the Internet's best-known media sites."

Apple's shunning Flash, King added, may have given Microsoft and HP what they perceive as a competitive opening. "Jobs' blanket attack on Flash offered two of Apple's largest, ablest and most dangerous opponents [HP and Microsoft] a chance to say, in essence, 'No problems with Adobe here.' This, in turn, cast unspoken doubt back on Jobs and his company's vaunted engineering staff: If HP and Microsoft can successfully deal with Flash, what's Apple's problem?

"But by ignoring a pervasively widely used technology like Flash and treating its parent company with disrespect," King concluded, "Jobs opened a door he must have preferred to leave closed: providing his competitors the opportunity [to] define these devices, technologies and markets far more clearly than he himself has done."

Whether or not Flash proves a differentiator for the average consumer, various tablet PC and e-reader manufacturers are also attempting to define the upcoming paradigm around price. This is not unexpected-every competitive business offers its own monetary race-to-the-bottom element-but both Apple and its competitors seem particularly anticipatory over price cuts.

According to a Feb. 18 report in The Wall Street Journal, HP executives may adjust the price of their slate device in order to compete against Apple's iPad. Meanwhile, Apple executives reportedly indicated to Credit Suisse analyst Bill Shope that they intend to be "nimble" with the iPad's pricing if the need arises.

The 16GB version of the iPad will cost $499 with WiFi, and $629 with WiFi and 3G. The 32GB version will cost $599 with WiFi, and $729 with WiFi and 3G. The 64GB version will cost $699 with WiFi, and $829 with WiFi and 3G. While iPads equipped with WiFi will be available April 3, those ordering an iPad with WiFi and 3G will need to wait until "late April" before their device ships. The contract-free AT&T 3G data plan sells for 250MB per month at $14.99, or unlimited for $29.99.

E-reader manufacturers have been adding increased functionality to their devices that bring them more in alignment with tablet PCs, including Web browsers and even SDKs (software development kits) for building applications. The increased number of tablet PCs and e-readers on the market has caused those prices to dip, as well, with Amazon's Kindle and Barnes & Noble's Nook both selling for $259.

Although other e-readers on the market also sell for a sub-$400 price point, one company has been determined to hold its device's price tag to a higher level: Plastic Logic's 4GB Que with WiFi retails for $649, and the 8GB model with WiFi and 3G costs $799. Plastic Logic has repeatedly emphasized the ability of the Que, which includes a 10.7-inch screen, to download and display Microsoft Word, PowerPoint and PDF documents.

In a conversation with eWEEK at January's Consumer Electronics Show (CES) in Las Vegas, Steven Glass, Plastic Logic's senior director of technical marketing, voiced the company's rationale for that cost: "It's a higher price point because it's a different demographic: customers who want to read business documents."

Glass also cited the Que's ability to add comments, highlight text and scribble on documents with a fingertip another competitive differentiator. "The rest [of the e-reader manufacturers] aren't doing that, at least in a way they can annotate."

On March 11, however, Plastic Logic CEO Richard Archuleta reportedly sent an e-mail to customers who had preordered the Que, saying that shipments had been delayed until summer. Archuleta blamed the delay on a need to fine-tune the device and "enhance the overall product experience."

The device could reappear on the market with a lower price point. It may even be a good idea. By summer, the battle among tablet PCs and e-readers will be likely raging in full.