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Friday, November 18, 2011, 05:51 am PT (08:51 am ET)

Major PC makers plan to concede tablet market to Apple, Amazon in 2012

Traditional PC makers like Dell and HP believe they have no advantages in the tablet market, and plan to phase out from competing with Apple's iPad, along with low-end tablets from content providers like Amazon and Barnes & Noble, in 2012.

Along with Hewlett-Packard and Dell, other "pure" PC makers like Acer and Asus plan to gradually exit the tablet market next year, industry sources told DigiTimes. The main reason is said to be that they cannot provide content like Apple, Amazon and Barnes & Noble.

So far Apple's iPad has dominated the market, representing nearly all of tablets sold, and hooking in users with its vast App Store selection. But new devices from Amazon and Barnes & Noble aim to take the lower end of the market with prices less than half that of Apple's $499 iPad, and make up the difference through sales of content like books, music and movies.

With tablet hardware prices that low, companies like Dell and HP that don't sell content are unlikely to make a profit, as they can't sell the hardware at a loss like Amazon is rumored to be doing with its new Kindle Fire. Industry sources reportedly said they expect devices from Amazon and Barnes & Noble will eventually be offered for free, serving as content platforms for the companies.

And even with their low prices, sales of newly launched touchscreen tablets from Amazon and Barnes & Noble were not as high as Apple's iPad, which industry insiders see as an indication that "strong enthusiasm for tablet PCs has already disappeared."

iPad 2


If accurate, the news that traditional PC makers have lost interest in the tablet market could be bad news for Microsoft, as the company's forthcoming Windows 8 operating system will feature a tablet-friendly interface. The company unveiled its plans on a prototype device designed by Samsung in September.

HP already attempted to penetrate the tablet market with its own hardware, operating system and application ecosystem, much like Apple, but the webOS-powered TouchPad failed to gain any traction and was quickly discontinued by the company. A year earlier the company partnered with Microsoft to release the HP Slate, but that Windows-powered device also failed as Apple's iPad took over the tablet market.