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Pricing and weak ecosystems behind slow tablet sales

Mikael Ricknäs | Nov. 4, 2011
While the iPad continues to be a big success, the tablet market offers a harsher climate to vendors other than Apple -- and pricing strategies may be an important factor in their difficulties.

Almost half see the tablet as a new product category, which means that brand is very important, and Apple is now seen as the safe brand, according to CCS Insight mobile analyst Martin Garner. Also, almost one third see the tablet as part of their computing set up, and that is bad news for phone vendors like HTC and RIM, Garner said.

To turn things around, the Android camp has a lot of work to do.

"It needs pretty hardware designs; more developers to develop tablet optimized applications, services and websites; and Google to develop a more tablet optimized browser and operating system, which it has done with Android 4.0," said Mawston.

Google is taking steps to move in the right direction, but perhaps not moving as fast as it would like, according to Mawston.

RIM also faces an uphill battle.

"The first thing it needs is more attractive hardware," said Mawston.

Besides that it also needs more attractive pricing, better messaging, an improved application store and more of a focus on the consumer, he said.

Despite current challenges most vendors are likely to stick it out. The expected sales volumes are too big for them to just throw in the towel. For example, on Thursday, Motorola launched the Xoom 2 and Motorola Xoom 2 Media Edition. In October, the company also launched the Xoom Family Edition, which costs available for $379.

If vendors get tablets right, the category is still expected to play a big role in the future of computing, with end users performing a growing number of tasks on their tablets, according to Garner. He expects more "proper competitors" to the iPad to arrive next year.

Garner isn't alone in thinking that products launched next year will help redraw the tablet map.

"In 2012, we can expect that established vendors will launch lower cost tablets, as well. If there is a significant price gap to the iPad, then maybe there will be some users that just want a good browsing experience. But I still think vendors will need strong content and services," said Cozza.

Samsung's products have been doing better than other Android-based tablets, but nowhere near as well as its smartphones. However, as the company continues to improve its products, volumes will also grow, Mawston said.

Next year will also see the launch of Windows 8, which will be used on both PCs and tablets, and turn the tablet market a three-horse race between Apple, Google and Microsoft, and supporters of the latter two, according to Mawston.


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