Monday, August 8, 2011

Tablets & the Value Proposition

There are hockey sticks and then there is tablet growth. According to ABI Research more than 17 million tablets shipped in 2010. The firm expects 46 million tablets to be shipped in 2011 and an estimated 126 million media tablets to be shipped worldwide in 2016.

Only three media tablet vendors can claim shipments of more than 2% in 2010. Apple led the pack with 85% of all shipments with Samsung at 8% and Archos at 2%. Or 95% of all products. Apple's market share might have dropped below 75% so far in 2011, but no one is likely to match Apple's appeal.

So what happened to the 80-plus media tablets we saw at CES in 2011? Not surprisingly, many of these tablets were from first-time vendors who were trying to differentiate product mainly by price. According to ABI this strategy could lead to a "netbook" effect, meaning end-users expectations are set higher than what products deliver. "Should this occur with media tablets, market demand will cool and hinder the transition from early adopters to the early majority."

ABI suggests fragmentation within the OS software will hinder growth of this device category. As we know application develops must choose an initial software platform. If the market upside is not significant, application development might be delayed. "The benefits of open software platform development have yet to be realized for media tablets."

While some of my publisher friends have privately stated that the tablet game is over with the Apple anointing and Samsung declared a worthy #2, the pesky eco-systems rules that the ODMs and OEMs live and die by suggest that the tablet value proposition remains unclear.

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