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October 18, 2010

Report: iPad Sales Driving Media Tablet Market to New Highs

By Mae Kowalke, TMCnet Contributor

There’s a change afoot in the consumer electronics market that, by end of 2011, could very well have a significant impact on companies manufacturing and selling devices ranging from mini notebooks (a.k.a. netbooks) and smartphones to e-readers and gaming consoles. Driven largely by popularity of Apple’s (News - Alert) iPad, consumers are increasingly migrating toward media tablets in lieu of other computing devices.




That’s according to a new report out Friday from Gartner (News - Alert). The research firm predicts that sales of media tablets will total 54.8 million next year, up 181 percent from 2010. By 2014, the number will reach 208 million units, Gartner projected.

For 2010, media tablet growth will be dominated by the U.S. market, accounting for 61 percent of sales for the year. But, by 2014, popularity of these devices will become more global, dropping U.S. share of the market to 43 percent.

One of the market segments to be hardest hit by this growth, Gartner said in its report, will be high-end smartphones, since users will have a hard time justifying “owning both when the differentiation in usage model is very limited.” Instead, users of 7-inch media tablets will “opt for a lower priced smartphone with a smaller form factor.”

The report added: “Mini notebooks will suffer from the strongest cannibalization threat as media tablet average selling prices (ASPs) drop below $300 over the next two years.”

That price drop will have another effect in the consumer arena: media tablets will increasingly become yet another type of device “lying around the house,” shared by family members.

Gartner defines media tablets as “slate devices that support touch and run a lightweight OS such as iOS, Android, WebOS or Meego. Examples of media tablets are the Apple iPad, Samsung Galaxy Tab and the Cisco (News - Alert) Cius.”

Among business users, media tablets will continue to be notebook companions rather than replacements, Gartner said. People who travel frequently for business tend to like 10-inch tablets as auxiliary tools because they enable faster access to e-mail, web applications, PowerPoint presentations and other tools than notebooks. Such users are likely to have three devices: a notebook, a smartphone, and a tablet.

“The majority of knowledge workers cannot use media tablets to replace their notebooks,” Gartner noted in its report. Still, the portability of tablets and their quick startup capabilities mean that “many users are paying for the media tablets with their own money to use both for work and pleasure.”

Predictably, manufacturers and other companies profiting from consumer and business electronics sales will find it necessary to make strategic adjustments in response to the media tablet market growth.

“Communication service providers (CSPs) who have so far subsidized mini-notebooks to drive mobile broadband uptake will shift their marketing spend to media tablets,” Gartner analyst Carolina Milanesi said in a statement to the press.

Milanesi added: “Such subsidies will help drive adoption among those consumers who see the initial hardware cost as a hurdle. For the rest, the freedom of paying for cellular only if and when needed, and not having to add another contract to the one a user might already have on his or her phone, is a great advantage and has so far proved successful for Apple.”

Speaking of Apple, the company is set to release quarterly earning results on Oct. 18 -- and the numbers that come out will be one indicator of the media tablet market’s robustness, Wall Street Journal reporter Yukari Iwatani Kane noted in a Friday report.

“Wall Street is expecting Apple to have sold 4.7 million iPads during the September quarter, but if Gartner is right, the company is sure to exceed that figure,” Kane said.


Mae Kowalke is a TMCnet contributor. She is Manager of Stories at Neundorfer, Inc., a cleantech company in Northeast Ohio. She has more than 10 years experience in journalism, marketing and communications, and has a passion for new tech gadgets. She holds a bachelor�s degree in communications from Thomas Edison State College. To read more of her articles, please visit her columnist page. She also blogs for TMCnet here.

Edited by Tammy Wolf







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