Who Could Thrive in the Tablet Market?

With the current presence of the Dell Streak, the current or impending release of the Samsung Galaxy Tab (depending on your market), the rumoured announcement of a BlackBerry tablet (supposedly named BlackPad), and HP’s announced intention on getting into the tablet market, there is excitement in some quarters of someone challenging the iPad in a market that Apple has had largely to themselves for the moment. HTC, Acer, Asus and others are expected to join the party over the course of the next 12 months. What most of them will lack in terms of a unified ecosystem with something like iTunes, they will gain with different features and a lower price. Not everyone cares about having access to a store like iTunes. The Android Marketplace and Blackberry App World are slowly starting to build their inventory, and Windows-based tablets have a fairly large available library (although not one generally suited to lightweight mobile computers). Depending on who you listen to, the iPad may have cut into netbook and even notebook sales, and additional choices in the market can only make it harder for the traditional mobile computing platform for the past few decades.

But even with all of these entrants, who are likely to thrive and not just survive? I don’t expect a “winner” here. Except for Windows and the iPod, you just don’t see one vendor dominating a particular market segment so thoroughly, but that’s a topic for a different discussion. What I expect is that consumers will have a choice of tablets, with varying sizes and features, and the market will be spread amongst many players, albeit not necessarily evenly.

I would expect Android tablets from mainstream names to do fairly well. Companies like Samsung and HTC have a strong history in portable devices, and they have the experience and facilities to be able to trim costs and keep up with demand. PC makers like Acer, Asus, and Dell aren’t complete strangers to portable computing, but none have had great success in smaller devices. Dell’s entry and then exit and re-entrance in smartphones and highly mobile computing, and other’s attempts a nontraditional PC-type devices makes them a question mark. Of the group that are the best known, brand-wise, I would say that Samsung and HTC have the best chance of thriving in the tablet market. They have access to distribution channels that can get the product in front of many types of consumers, being able to use both big-box retailers like BestBuy and Walmart, as well as mobile phone-oriented stores to display and sell the devices. Acer and Asus have a presence in general purpose electronics stores, but their main claim to fame has primarily been price. In this market, they are up against pretty stiff competition that knows very well how to shave fractions of a penny and still keep decent product quality. Dell has never really succeeded outside of their comfort zone of desktops, laptops and servers. They have tried in the past with PDA’s during the peak of the PDA market (and exited without much success), and dabbled in MP3/media players with limited results. I fully expect Dell to try, but unless they see a huge jump in demand, I expect they will quietly leave and stick with what is still working for them.

HP and RIM are a pair of dark horses in this game. HP has had long experience (but spotty success) with Windows Mobile devices. Their acquisition of Palm, thus gaining WebOS, comes with a lot more risk than reward. They have a platform that, while technically respectable, has had mediocre results from both a sales and 3rd party developer community point of view. For myself, as an early developer in mobile apps, I’m not any more encouraged to try building for WebOS now that HP has it than when it was run by Palm. HP will kill off products that aren’t selling well, or don’t fit within strategic goals. Ask any developer for HP’s MPE-based systems, or any former DEC developers that saw their operating systems axed when HP realized they had too many. HP paid a lot of money for Palm, and I expect them to give it a go. But with yet another API and environment for developers to build for, I can see WebOS continuing to have issues trying to build a 3rd party developer base. Developers are, by and large, going to target the biggest markets, and WebOS just isn’t there.

RIM is a slightly different story. Their entire business is mobile devices, and they still have a respectable installed base for their BlackBerry devices. Where RIM has struggled is in the retail market. While App World isn’t bad, it doesn’t have anywhere near the selection that Android Marketplace has, let alone the monster iTunes App Store. RIM still seems to be struggling with how to run a curated app store, given the markedly different comments I’ve seen on their own forums about the approvals process. RIM has also not done a great job in preserving the life of their old devices, mainly by not keeping them up to date with the latest version of BlackBerry OS. While most Android phones will run the latest and greatest version, and Apple only recently starting to abandon the first generation iPod Touch and iPhone, both camps have made an effort to put off orphaning products as long as they can, something RIM really hasn’t done. Unless RIM can somehow get a handle on the retail market, without losing touch with their enterprise base, RIM could find themselves on the outside looking in on tablets.

Basically, the trend as I see it is that the most success will be for those already familiar with the retail market, and already familiar with building highly portable devices. Apple, HTC and Samsung have experience and success with both. Dell and HP have done well in retail, but really has never had much luck with anything outside of PC’s and servers. HP’s bigger challenge is using an OS that hasn’t had widespread adoption, and doesn’t show any signs of that changing. RIM has done well in the enterprise, and they do understand the issues around highly portable devices, but they still don’t seem to get the retail market.

Unless they see success, I can see Dell pulling the plug on the Streak in 12 to 18 months. HP will likely soldier on for a year or two, then start to kill the product by simply not releasing many models, until it disappears out of apathy (much like their Windows Mobile devices did). I can see RIM continuing to succeed in the enterprise market, and those sales should help prop up the retail side for a while.

What I’m not saying is that you will only see Samsung, HTC and Apple tablets at BestBuy. As with notebooks, media players, televisions and digital cameras, there will always be a number of vendors selling something. What I expect, though, is that majority of the sales will be split in some way between those three. I expect others, like Sony and Toshiba, will try to play at some point, and it’s possible they may have some success. But of the major players right now, Apple, HTC and Samsung have the greatest chance of success and setting the tone for the tablet market initially.


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