When Apple introduced the iPad in 2010, it was not clear whether tablets — occupying a strange space between the smartphone and the laptop — were here to stay. But now analysts predict sales of at least 117 million tablets by the end of 2012, the majority in the final quarter of the year. In a survey, 15 percent of tablet buyers told the Maritz Research firm that, if given the chance, they would purchase a tablet before buying a computer, a smartphone or even a television, making it a potential all-in-one replacement device.
“People coming in at this point are a wide cross section of society,” said Rhoda Alexander, a tech analyst at IHS iSuppli. “They held back initially to see if it was a fad but are now seeing these devices everywhere they go.”
The rising interest means there are tablets aimed at all segments of the market — from the businesslike Microsoft Surface, with a full keyboard on its cover, to the Toys R Us Tabeo, meant for children as young as 5.
Apple added two tablets to its lineup last week — a revamped full iPad and the more portable iPad Mini. Google announced two new tablets Monday, an updated version of its Nexus 7 and a larger, 10-inch tablet. Meanwhile, Amazon.com has expanded its line of low-cost Kindle Fires, and retailers Barnes & Noble and Best Buy now have their own offerings. Then there are companies such as Samsung, Asus and Lenovo — all of which are taking a second crack at the market.
This holiday season could establish a pecking order for the various tablets cluttering the market and provide insight into what consumers value — price, functionality, or app and entertainment options. The most vulnerable, Alexander said, are companies that make “white box” tablets and have no brand recognition. Those devices compete solely on price but have no unique content or hardware that distinguishes them.
The $29 billion tablet market is attracting new competitors looking to offset flagging revenue in the personal-computer industry, which is expected to shrink this year for the first time in a decade. Others see an opportunity to leverage the devices to reach consumers more directly.
“The value proposition for a retailer is to drive additional sales of their physical goods or to build brand recognition,” Alexander said.
Toys R Us’s Tabeo gives the retailer a way to build credibility with safety-focused parents who want a tablet with only child-friendly content and software. The toy store began exploring the idea after seeing the success tablets had last holiday season.