Apple iPad 2 Release Marks Start Of Tablet Frenzy

The US launch of Apple’s iPad 2 on 11 March marks the beginning of a huge growth in the tablet market. At the recent CeBIT technology show in Germany, there were at least 39 companies showing tablets just at that single show.

Many of these companies were showing more than one type of tablet. Asus, for example, had four distinct tablets aimed at different segments of the market. Acer had three. While many companies were bringing just a single tablet of one kind or another to the market, it’s also a sure thing that there were plenty of tablet vendors that weren’t at CeBIT, including both Apple and Motorola, maker of the new Xoom tablet.

While nobody has a firm handle on just how many tablets will actually reach store shelves this year, it’s safe to suggest that there will perhaps be as many as 100. Now, that’s a lot of tablets, considering that these devices have really only been on the market for little more than a year.

Attrition and price stabilisation

So what will be the result of a market where there are 100 tablets being offered for sale? The first thing you’ll see is a lot of attrition. Not all of those tablets will be good enough to make it in the real world. With this level of competition, a tablet will need to be really good to make it in the marketplace.

The second thing you’ll see is price stabilisation. While Motorola is offering its Xoom for about $800 (£490), it’s safe to predict that it won’t stay at that price when the other tablets, including the iPad 2, are being sold for less. While Apple may be able to maintain its prices, the pressure to reduce prices will be strong, since there will be dozens of other well-made, feature-filled tablets available.

Price pressure will particularly affect the Android tablet market, if only because there will be so many essentially identical devices on the market. Buyers will be reduced to choosing their Android tablets by price, and a number of the companies making those devices won’t survive the price pressure.

Ultimately, there will be a bloodbath among Android tablet makers. While the winnowing won’t affect Apple directly and probably won’t affect Windows tablets because there is less competition, it still won’t be a pretty sight. Manufacturers will find it to be a tough market if only because the price competition and feature growth will spill over.

Innovation and growth

The third thing you’ll see is nearly constant innovation. Companies will need to offer more to get the attention of consumers. You’ll see new features, better construction, better stability, more connections and more apps in respective stores. So far, it sounds like a pretty good deal.

But there are downsides to such unrestricted growth. There will be many buyers who will find themselves stuck with orphaned tablets when companies find out that you can’t just slap together some generic components and expect to break open the tablet market. These companies will soon find themselves out of the tablet business.

Eventually, perhaps by the end of 2011, the market will sort itself out. The market will segment into tablets for specific markets, such as Fujitsu’s secure enterprise tablet or the engineering tablet with the Waco digitizer from Asus. But the biggest segment will be consumer tablets, of which the iPad and soon the iPad 2 are the primary examples. There, the majority of tablet brands will fail to get traction in the marketplace after selling a few thousand devices and will simply fade away. Unfortunately, some big names, such as HP’s WebOS tablet, may be among those.

In short order, the consumer tablet bubble will collapse. While the choices a year from now will be much greater than they are now, they will be nothing like the dozens of tablets that didn’t make the cut for whatever reason. The winners, which will probably include Apple, Motorola and Samsung, will be battered, but they’ll still be around. But plenty of others won’t.

Ultimately, however, the market will be stronger after the Darwinian selection takes place. We’ll see tablets that are fairly priced with features that users really need in form factors that make sense. By the time the iPad 3 arrives in stores, it’ll certainly have those features. It will probably be priced no higher than the current iPad, and it might even be a little cheaper. The Motorola Xoom will be cheaper and probably have upgraded features as well.

What this means for tablet buyers is choose carefully and if you think you’d prefer having a tablet from a company that stays in business, then stick with the leaders. You may find that a little more boring, but at least you’ll still be able to get tech support next year.