John Paczkowski

Recent Posts by John Paczkowski

Tablet Market Booms as More Also-Rans Chase Apple

The tablet market is exploding — thanks largely to the runaway success of the iPad. And while there don’t seem to be any new winners beyond Apple’s first-to-market device, there are enough competitors (and losers) to force Wall Street to raise its tablet forecasts on their sheer number alone.

Consider Barclays analyst Ben Reitzes’s calendar 2011 tablet forecast. Originally it called for 47 million tablets. Now it calls for 62.7 million. Of those, Reitzes expects 38.9 million to be iPads, significantly more than the 31.5 million he’d originally predicted. The remaining 23.7 million will be “non-Apple tablets,” up from his first prediction of 15.6 million.

The rationale for these increases? For the iPad it’s simple: Improved product availability in the U.S. and abroad and strong demand in the consumer and corporate spaces. As Apple COO Tim Cook said on the company’s last earnings call, “We sold every iPad we made.”

And for those non-Apple tablets? Says Reitzes, “While indications are that sell-through volumes have been soft for competitive products to the iPad, our ‘other’ tablet estimates are still driven higher by the sheer number of other vendors shipping devices into the channel — with some of the largest estimated volumes coming from Samsung, RIM, Motorola, HP, Acer, Asus and Amazon.”

In other words, those companies are shipping a ton of tablets to their retail partners, despite a lack of demand. And no good can come of that. Push too much product into the channel when there’s little demand for it and you end up with an oversupply and the sort of nasty inventory problems that dragged Palm into the mud. And those problems will only grow worse with the debut of Apple’s next iPad, which Reitzes suggests could occur late this year.

“Note that based on increased evidence in the supply chain, it may be possible for a new special edition iPad to ship as early as this fall, featuring an enhanced display, upgraded cameras and faster wireless capabilities — which could make our estimates conservative,” he writes, adding, “Apple does not necessarily need this product to maintain and even extend its lead.”

Indeed. Remember, consumers don’t seem to want tablets … they want iPads.


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