December 2012

Holiday Tablet War

Holiday Tablet War Heats Up

By: Marie-Claude Veillette,

Even though Apple still leads the tablet market with the iPad, its major rivals – Microsoft, Google and Amazon – battle at a near-unprecedented scale and pace to knock Apple off its perch as the world’s top technology company and win what Google executive chairman Eric Schmidt has called “the defining fight in the industry today.”

A few weeks before Christmas, the war is officially declared for the benefit of consumers who will have plenty of buying options during the holiday season with new Android and Windows-based products. According to an estimate by U.S. research firm IHS, tablet sales could exceed 20 million units during the Christmas season only.

“The tablet space is where the growth is. That’s why they are all fighting over it. PC shipments are down and some tablet buyers may never buy another PC,” said Michael Allenson, Strategic Consulting Director in the Technology and Telecom Research Group at Maritz Research.

Late October, Apple launched the hostilities with the release of its iPad Mini, set to compete with smaller and cheaper tablets such as Google’s Nexus 7 and Amazon’s Kindle Fire. The Mini was officially revealed strategically 3 days before the launch of Microsoft’s first tablet equipped with Windows RT, a mobile version of Window 8. Even if the first version of the Surface doesn’t have a regular intel-style PC processor (and has, for that reason, received mixed reviews so far), Microsoft has generated significant interest around its new tablet and plans to invest over a billion and a half dollars in advertising to promote the release of another version of the Surface in January 2013, featuring a traditional Intel processor and the ability to run regular Windows programs.

With the competition more intense than ever, tech companies hope that consumers will look for something new this Christmas, from the lowest-end Fire at $159 to a Surface around $499 or the newest iPad 3 at $829. Because of their lower prices, iPad Mini, Kindle and Nexus tablets are expected to be among the most popular Christmas presents this year.

For the rest, we’ll see how the biggest names in consumer technology will perform with Google and Microsoft investing deeply in hardware manufacturing. The Surface RT tablet already represents a direct assault by Microsoft who is trying to reinvent laptop computing. Up to now, Microsoft has being positioning its new device with a thin click-on keyboard as the ideal combination of PC and tablet capabilities that would make it ideally suitable for work as well as entertainment.

Will the strategy succeed and will this be enough to dislodge Apple? Only the future will tell, but according to Market researcher International Data Corp (IDC), Apple tablets sales, which have captured about 60 percent of the market this year, are about to slip back as competitors raise their challenges.

Tablet Computer Sales Will Overtake Laptops by 2016

By 2016, tablet shipments are expected to overtake notebook shipments as consumer tastes shift from performance to convenience. Easy to carry, thinner, lighter and often times more intuitive to use, tablets are expected to grow from 121 million units sold to 416 million devices by 2017.

This is not to say notebooks are dying; far from it. NPD research firm predicts that notebooks sales will still account for 49 percent of the mobile PC market, shipping 393 million units in 2017 compared to 208 million in 2012. To stay in the race, notebook makers are seriously looking at putting more tablet-like features into their products such as touch screen functionality.

Worldwide, 66 percent of all 2012 tablets sales occurred in mature markets such as North America, Japan and Western Europe. The explanation is simple: In these developed markets, there are generally many different devices in a household; a notebook for high-performance tasks and productivity apps, and a tablet for consuming content such as surfing the web, playing games and watching video. It is not always the case in emerging markets.

Are We Indeed Entering a “Post-PC” World?

Tablets may be selling like hot cakes but it doesn’t mean that PCs will cease to exist or even that some tasks are not better suited to a full OS computer.

It means, merely, that most everyday things that people have been doing on PCs for years will be done by people via smaller, simplified mobile devices in the future.

But again, there will always be a market for the personal computer. To date, the iPad passion has been mainly a consumer phenomenon. That doesn’t mean companies aren’t buying and deploying tablets, just that they’re not doing it at the same rhythm as consumers.

Most of the PCs in the world are owned by businesses and they will still reign in this area until tablet devices include critical features such as security, authentication, and administrative controls. Beyond these considerations, tablets will always be useful for lighter tasks, but will quickly show some limitations when it comes to performing more demanding tasks such as content creation and editing.

In the consumer field, it is pretty much the same thing, but on a different scale. Even if tablet sales surpass PC sales, people will still continue to use their laptop/desktop for certain applications and use their tablet for others. Until the tablet becomes more like a PC, they will continue to be used in conjunction with other devices that people own, such as smartphones, desktop PCs and notebooks.