Wednesday, February 3, 2010

iPad / Tablet Market

The much anticipated launch by Apple last week of its iPad computing device highlights the real start of a new market segment for media tablets that according ABI Research, will see 4 million units shipped in 2010.

By 2015, shipments are expected to reach about 57 million annually. ABI defines media tablets as having a touch-screen interface, 5-11 inches in size, with Wi-Fi Internet connectivity and video and gaming capabilities.

The current thinking is the 'tablet' is targeted at entertainment and media consumption and will not cannibalize smartphones, netbooks or laptops. I agree that it won't impact smart phones largely because a 10" x 9" device is portable device but definitely not a mobile device. However, I do think it can potentially cannibalize the netbook and laptop market and maybe even Apple's iTouch. Why?
  • Laptop - They are still expensive (that's why there is a netbook market) and I think many people way overbuy what they actually want a laptop for ... Internet access.
  • Netbook - I was duped on this myself. Like many, I focused on battery life and forgot about performance. They are WAY underpowered, even for internet access. Our Samsung is so slow, we don't use it. At the low end price point, Apple's iPad sits right in between a high end netbook and a low end laptop. Apple is a pricing master, this price point wasn't by accident.
  • iTouch - Love the iTouch and many people stick with a traditional wireless plan and use the iTouch as their multimedia device. However, the real secret is that the iTouch took off not as an 'iPod' but as a gaming platform. That's why they still haven't added a camera and some other features I think it needs. A high end iTouch is $399 today and the low end iPad will $499. Same basic device, but the size of the iPad opens up a whole new world world.
Net, Net I think people will initially buy the iPad because it's cool (and it definitely is) but there is a huge overlap with how the mass market uses the iTouch (Gaming, Music), Netbooks (Internet Access), and laptops (Internet access and portable computing). However, as the 'early adaptor' dust settles, I think consumers will be making a conscious decision to by an iPad or an iTouch / Netbook / Laptop.