Tablet Market Still an Apple iPad World

The Apple device still dominates the young space, but competitors at CTIA said they see changes on the horizon.

NEW ORLEANS €” Though a relatively nascent market at 2 years old, tablets already are having a significant impact in the wireless space, from the amount of traffic they're driving across carrier networks to the bring-your-own-device (BYOD) trend that is putting pressure of corporate IT staffs.

No tablets have been more dominant than Apple€™s wildly popular iPad, which reinvigorated the space when it was introduced in 2010. Since then, OEMs have come out with their own tablets, with most based on Google€™s Android mobile operating system. Also, vendors that didn€™t before have a name in the compute space€”like Amazon and Barnes & Noble€”now also have tablets on the market, getting there through their e-readers.

Despite the increased competition, Apple continues to rule the market.

Whether that€™s going to change any time soon was a subject of discussion at a couple of panels at the CTIA Wireless 2012 show here, without much resolution. However, Nick DiCarlo, vice president of product planning for Samsung Telecommunications America, cautioned that tablets€”while popular€”still constitute a new market.

€œIt€™s in the very early days,€ DiCarlo said during a panel discussion May 9, noting that he expects the market and consumer tastes to change significantly over the next few years.

The latest analyst numbers show Apple with a significant lead in the space. IDC analysts May 3 said that in the first quarter Apple€™s share of unit shipments rose to 68 percent, while sales of Android-based devices fell, with Amazon taking a significant hit. The same day, NPD DisplaySearch analysts said that while Apple holds the lead, the gap between iPad and Android devices will shrink by 2017, with Apple expected to hold 50.9 percent of the unit sales and Android devices climbing to 40.5 percent.

"A growing diversity of operating systems is driving the increase in demand for tablets, as well as rapidly evolving features," NPD DisplaySearch analysts said when their results were released.

DiCarlo, whose company currently ranks a distant No. 2 behind Apple in the tablet space, said Samsung has at least seven tablets in its portfolio, giving consumers options that Apple can€™t. He noted that Samsung has seen success with its 7-inch tablets, a differentiator from Apple€™s 10-inch devices. The smaller systems are easier for people to hold and carry with them, which is why the company debuted with the 7-inch form factor.

€œThe outcome of that is that 7-inch tablets are very successful,€ DiCarlo said. €œWhat we knew at the time [of its first tablet release] was that mobility is very important in buying [decisions].€

Jaime Iannone, president of digital products for Barnes & Noble, which offers the Nook tablet and e-readers, said user experience also will play a key role going forward. With the Nook, customers immediately saw it as a device for reading, and are willing to consider it for other uses now that the Nook tablet offers such capabilities, such as email, Web browsing and apps. And like DiCarlo, he said the portability of the 7-inch form factor is important to users.

Android tablets also are facing a challenge in the enterprise, where iPads have helped fuel the trend toward the consumerization of IT. Employees already were looking to use their own smartphones for work; iPads have only furthered the BYOD drive. In addition, they€™ve become increasingly popular with high-level company executives, putting even more pressure on IT departments to find ways to secure and manage these devices, according to panelists at a forum May 8.

And few of them said they are seeing Android tablets.

€œWe€™re seeing mostly iOS across the enterprise,€ said Leila Modarres, vice president of marketing for DeviceAnywhere.

Walt Mossberg, technology columnist for The Wall Street Journal and moderator for the May 9 panel, said there has been a key difference in how smartphones and tablets have evolved. Smartphone users almost always need a data plan through wireless carriers, which not only like to see a variety of devices they can sell but also engender loyalty from many of their customers, Mossberg said. When the iPhone first came out in 2007, it was sold exclusively on AT&T, so customers of other carriers were asking for devices that could offer the same things as an iPhone, and Android devices were there to fill the gap.

However, carriers have little influence in the tablet market, where few users demand data plans, opting instead for WiFi. Without that, the tablet space€”at least for now€”remains solidly an iPad one.

Samsung€™s DiCarlo said he expects that to change, and that eventually most tablets will be sold with data plans. He noted the shared data plans that are in development at AT&T and Verizon Wireless, where families essentially can buy a bucket of data each month that multiple devices€”including tablets€”can draw from. That will encourage consumers to look for data capabilities with their tablets.

€œEventually, like smartphones, data will become a factor€ in consumers€™ buying decisions, DiCarlo said, noting that already there is a strong cellular mix in the tablets Samsung sells, and that European buyers already are demanding calling capabilities on their tablets.