Josh Ong
According to analyst Mark Moskowitz aggregate tablet build plans have declined by roughly 10 percent since early March. Moskowitz took the reduction to mean that "non-Apple tablet hopefuls have adjusted to the weak showing so far."
Describing the trend as an "early dose of reality," the analyst noted that the market has yet to see a high-volume tablet competitor to the iPad. Moskowitz cited Asustek’s Eee Pad Transformer, Motorola’s XOOM, RIM’s PlayBook, and Samsung’s Galaxy Tab as examples of tablets that have failed to gain traction and whose makers have consequently reduced build plans.
In early March, Moskowitz warned of "increasing risk of a bubble burst" to the tablet market in the second half of 2011 because of exaggerated build plans from tablet makers. Moskowitz saw Apple's iPad 2 as making it tougher for rival first-generation tablets "to play catch-up," which would result in poor sales. The recent reduction in production volumes has allayed some of the firm's fears of a tablet bubble.
Moskowitz acknowledged that extrapolating trends from build plans can be problematic, noting that the firm applies discounts to adjust for limitations. J.P. Morgan now projects 2011 build activity for the tablet market to come in at 63 million after a discount of 14 percent. The firm had previously applied a 20 percent discount to arrive at a 65 million unit estimate, but reduced the rate after tracking "widespread reductions in build activity" in recent months.
According to the analyst, the "nascent tablet market stands to become big enough to create a ripple effect in the broader tech food chain" in 2011. Total tablet shipments in 2011 will reach just 3 percent and 11 percent of total handset and smartphone units, respectively. However, when compared against desktop and notebook PC units, tablet shipments will reach 32 percent and 21 percent respectively. Thus, "tablets stand to be big enough to have positive (or negative) spillover effects" in the broader market, Moskowitz said.
Moskowitz sees "limited upward pressure" in build activity occurring throughout the summer, adding that any increase will likely come from Apple. Some tablet makers are waiting to "see how the back-to-school reception is," while others are waiting to roll out 4G LTE tablets, he said.
Apple admitted in April that it was experiencing the "mother of all backlogs" with the iPad 2 and had sold every unit it could make last quarter. Production constraints for the iPad 2 have caused Wall Street analysts, including Moskowitz, and research firms to lower their shipment estimates for the year. J.P. Morgan currently estimates Apple will ship 6.75 million iPads in the June quarter
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79 Comments
Tip to Apple competitors in this area: Make sure the person in charge of developing these products can tell the difference between a large piece of burnt toast and a tablet.
You can't wave around a piece of over-priced useless junk and expect people to buy it.
Ha ha. It's easy to laugh when these guys waited for Apple to innovate, then slapped together some cheap parts with unintuitive software and thought they'd fool everyone with their half assed knockoffs. Apple invented this market of tablets closely tied to smart phone parts, they thought of everything In detail way in advance. They had the vision, literally everyone else copied, poorly. The only ones who seem to be doing QA and thinking it through are HP. Maybe they'll have a viable hit, or maybe they're just slow. Guess we'll see.
What magicj said. To date, almost no one has hit on functionality, style, size, and price.
No one offers a superior experience, and almost every one suffers from some fatal flaw on the software side of the fence. (No email RIM? Really?)
At best, their primary reason to buy seems to be: "Hey! We have a tablet too!" When that gets no response they then frantically play the Flash card, to which many people (including me) yawn and say, "Who cares?"
I get along just fine without it, and the lack of Flash blocks the majority of the annoying animated advertising that's infected the web. They then switch to processor speed and the number of USB ports, which endears them to the geek market but that's about it. As Steve said, "If all you can talk about is processor speed, you're missing the point."
Come on people! Surprise us! If you want to sell us your gear, then show us something NEW. Don't just slap Android on a stock design, or resort to some lame trick like Flash, or, as in the most recent RIM Playbook ads, tout the ability to play a movie in the background where I can't see it.
Stop with the "me too" product line, and show us SOMETHING we haven't seen before...
I just use iSwifter on the iPad if I have a burning need to view Flash web content.
Remember at 63M - the iPad is still just in the lead, down from 100%. The question is whether it can continue above 50%