Wild West of Tablets: Which Will Succeed?

by Brad Moon | November 29, 2012 6:00 am

The tablet computer may have arrived back in 2010 thanks to the launch of Apple’s (NASDAQ:AAPL[1]) wildly successful iPad, but 2012 will undoubtedly go down as the year tablets really went mainstream.

The iPad is on its fourth generation and has added a smaller version), while Google (NASDAQ:GOOG[2]), and Amazon (NASDAQ:AMZN[3]) are mounting a credible challenge to Apple’s ownership of the market. Heck, even Microsoft (NASDAQ:MSFT[4]) is getting in on the game.

IDC is predicting 117 million tablets will be bought in 2012 and with a slew of new releases in the past month — just in time for holiday shopping — this Christmas is expected to be a huge one for tablets[5]. Plus, Gartner is predicting tablet purchases by businesses[6] will be 13 million units this year — and will jump to 53 million by 2016.

At their most basic level, most tablets look similar: rectangular slabs of glass and plastic or aluminum. They even run similar operating systems and the best fall within a similar price range. But they’re all not the same.

With that in mind, here are the five tablets we think stand out this year and down the line.

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Apple iPad

Let’s start with the obvious: Apple virtually created the tablet market (those tablet/laptop hybrids[8] that sold by the hundreds don’t count). And while it’s losing share as more competitors pile on, the iPad remains the dominant tablet device for both consumers and businesses, holding around 50% of the market.

Apple also continues to offer a premium user experience with tight OS integration, beautifully machined glass and aluminum cases and Retina quality display. Plus, it now offers the smaller iPad Mini and the previous iPad 2 for more price- or size-sensitive customers.

Add in the iTunes store and the largest app store (including 250,000 titles that are iPad optimized) and Apple will continue to lead the pack for the foreseeable future.

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Google Nexus

Google just got into the tablet business in June, but it’s making waves in a big way. The $199 Nexus 7 proved that manufacturers can sell a high quality tablet for under $200 — so long as they don’t care about making money directly from sales.

The device quickly sold out on launch[9] and is on its way to becoming the best selling Android tablet ever. Continuing to challenge Apple, Google released a 10-inch Nexus just in time for Christmas, with a 300ppi (pixels-per-inch) display that tops the iPad’s vaunted 264ppi Retina display — and at a price that undercuts Apple’s by $100.

Consumers who want a strong app library (thanks to GooglePlay) with a cheaper price-tag will continue to snap up the Nexus, while tech geeks who resent Apple’s closed iOS system will look to Google’s tablet as the best combination of premium hardware and an Android experience.

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Amazon Kindle Fire

Last year’s Kindle Fire tablet was an unexpected bestseller on top of arguably being the device that proved a demand for smaller, less expensive tablets. Closely tied to Amazon’s media empire (despite running a customized version of Android, the tablets buy movies, e-books, music and apps directly from Amazon) the Kindle Fire has tremendous appeal to consumers.

This year, Amazon introduced Kindle HD models with faster processors, a bigger model to compete against the iPad and high definition displays (1920 x 1200 on the 8.9-inch model).

An ad-supported 8.9-inch Kindle Fire HD is $299, while a 4G LTE model with a cheap monthly data plan goes for $499 and the base model 7-inch Kindle Fire has dropped to $149.

Analysts are calling for Amazon to move 8 million Kindle Fires over Q4[10].

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Windows Surface

Microsoft’s surprise tablet duo[11], the Surface RT and Surface Pro, caught many people off guard. So far, Surface RT sales have been described as modest[12], despite considerable launch hype and excitement over the innovative integrated keyboard covers.

The Pro model won’t be available until sometime next year, though. I expect the Surface — especially the Pro version — to be a big part of the tablet market through 2013. These are the first tablets to run Microsoft’s new, tablet-inspired OS, so Microsoft will push to make sure its tablet flagships remain highly visible.

The Windows Pro model in particular is likely to catch on in the enterprise market since it’s able to run Windows 8, including desktop Windows software applications. That significantly reduces the compromises required to use a tablet in place of a PC.

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Samsung Galaxy Note

Samsung manufactures Google’s latest tablet, the Nexus 10. Its own line, on the other hand, is better known for being the subject of Apple sales injunctions and inflated sales numbers[13] than for being a standout device.

In the end, Android tablet fans are more likely to look to Google. However, Samsung has carved out a nice little niche with its Galaxy Note “phablet,” a 5.5-inch smartphone/tablet hybrid that many analysts laughed at. Well … until they saw the sales numbers, that is.

Sold primarily through wireless carriers, this gadget includes a stylus, runs Android and can be used as a phone — by those who aren’t self-conscious. The latest version, the Galaxy Note 2, sold 3 million units in its first month[14] on the market and after two months, has now topped 5 million. Clearly, Samsung has a winner here. Plus, it has this niche pretty much to itself.

As of this writing, Brad Moon did not own a position in any of the aforementioned securities.

  1. AAPL: http://studio-5.financialcontent.com/investplace/quote?Symbol=AAPL
  2. GOOG: http://studio-5.financialcontent.com/investplace/quote?Symbol=GOOG
  3. AMZN: http://studio-5.financialcontent.com/investplace/quote?Symbol=AMZN
  4. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  5. Christmas is expected to be a huge one for tablets: http://slant.investorplace.com/2012/10/tablet-computer-google-nexus-microsoft-surface-ipad-kindle/
  6. predicting tablet purchases by businesses: http://www.gartner.com/it/page.jsp?id=2227215
  7. Compare Brokers: https://investorplace.com/options-trading/broker-center/
  8. tablet/laptop hybrids: http://www.tabletpcreview.com/default.asp?newsID=619
  9. sold out on launch: http://www.zdnet.com/nexus-7-sees-incredible-demand-sells-out-at-major-retailers-7000001292/
  10. 8 million Kindle Fires over Q4: http://news.yahoo.com/amazon-says-big-weekend-kindle-sales-more-double-142653728--finance.html
  11. surprise tablet duo: https://investorplace.com/2012/06/under-the-skin-of-microsofts-surface/
  12. described as modest: http://www.engadget.com/2012/11/11/ballmer-says-microsoft-surface-sales-off-to-modest-start/
  13. inflated sales numbers: http://gigaom.com/apple/more-secrets-revealed-galaxy-tabs-uninspiring-u-s-sales-numbers/
  14. sold 3 million units in its first month: http://news.cnet.com/8301-1035_3-57553995-94/samsung-5m-galaxy-note-2-units-sold-in-2-months/

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