Will the tablet market be more like the PC market or Smartphone market?

Will the tablet market be more like the PC market or Smartphone market?

The PC market developed very differently from how the smartphone market is taking form. Because of this, it’s interesting to think about how the tablet market will unfold.

Will it be more like the PC market, where we had one dominant OS (Microsoft) and one much smaller player (Apple)? Or will it develop more like the smartphone market where we have multiple viable platforms including iOS, Android, BlackBerry and Windows Phone?

The way I see it, the PC market is not a very good comparison because by the time market share was carved up between Microsoft and Apple, there was no such thing as the Internet. There was no web browser. There was no HTML, or TCP/IP. Instead, PCs and Macs ran stand-alone applications and saved files to disks. You had to buy software in actual stores (or by mail). Everything was disconnected.

In contrast to this, smartphones were born in the web era. The first real smartphones were from RIM, with their BlackBerry solution. Sure, the web browsers were horrible, at least until the iPhone came out. Apple truly changed the game with respect to consumer expectations for mobile browser performance.

Today, modern smartphones have good browsers. This even includes BlackBerries, despite it taking RIM about 4 years to pull together a decent WebKit experience on their phones.

With the web becoming the center of our user experiences, it ultimately leads to less differentiation within the actual phone operating system. They can all make phone calls, they all have email clients, they all have highly responsive touch screen interfaces, and they all have great browsers.

These great browsers are now supporting the next-gen of web programming, which is HTML5. The game has only just begun, but we’re seeing a pretty compelling set of capabilities coming out of HTML5 from gaming to video on demand to magazines.

Changes always seem to take a lot longer to unfold than the general population expects (and I’m no better), but I think great browsers + HTML5 will diminish the importance of the mobile phone operating system. The OS isn’t a huge point of differentiation anymore.

If smartphones were born in the web era, tablets were born in the next-generation HTML5 web era. Their operating systems are not a big point of differentiation anymore. What matters are applications and end-to-end solutions. Ultimately I believe we’ll see several successful competing platforms for tablets, and that’s because they will all run very strong operating systems that simply connect the user to a wide world of HTML5 “stuff”.

What makes Apple different?

Today, Apple has a huge advantage. They’ve got more native-coded games and apps for the iPad than any other tablet platform. This advantage is important because it leads to early market share gains.

Also, Apple has best-in-class apps of its own. The OS just runs apps, but you have to be a great software company to create these apps. Apple is a great software company. So is Microsoft. But Google’s software brilliance has been more about organizing information and managing huge quantities of data (Goole search, Adwords, Google maps, etc) versus building amazing photo viewers, HD video editors, or music production software. And RIM? In many ways I feel they’re not a software company at all. They’re trying to become one through acquisition.

Ultimately, I think Apple’s software advantage will diminish as publishers start using HTML5 instead of native development. I’m not saying it will go away -- I’m saying the advantage will shrink. Obviously not all publishers will make this leap, but for the ones who can do so without compromising on quality, they’ll do it to save money quickly be cross-platform compatible.

But then, even if HTML5 levels the playing field on apps, Apple is still left with an incredibly powerful solution set including music, TV, movies, cloud, and devices such as the Apple TV (and even the Airport Express, which I use daily to stream music to my stereo).

I think a discussion of HTML5 and what it does to the various mobile players can get really interesting. Will publishers move full force to HTML5 and sell via web apps so they can own their customers (versus Apple owning them)? Will competing platforms provide APIs so that HTML5 apps and open-standard hardware (think DLNA) can duplicate all of the advantages that I get from having an Apple-powered multimedia household?

Yes, of course these competitive threats can develop into something powerful. So the trick for Apple, today, is to grab as much market share as possible now. Fast. Because let’s face it ... we don’t switch brands because the alternative is just as good. We switch only when the grass is greener, or significantly cheaper.

So that’s my take. I think the tablet market is much more likely to develop like the smartphone market instead of the PC market. If I told you that up front, you might think I was bearish on Apple, because it would mean the iPad doesn’t stand as much of a chance at holding onto its incredible market position. But it does, and I think it will. I just see other competing platforms succeeding too.

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Chris Umiastowski

Chris was a sell side financial analyst covering the tech sector for over 10 years. He left the industry to enjoy a change in lifestyle as an entrepreneur, consultant, and technology writer.

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Reader comments

Will the tablet market be more like the PC market or Smartphone market?


Currently I think tablets are nothing like a PC. They are all beefed up smartphones. I love my iPad but it could never replace my computer in a million years. With a tablet you are restricted to Apple's or Googles market to install apps (programs). A tablet is a just a toy until they are capable of doing what a computer can do. I think the windows 8 tablets will accomplish that.

If you don't think you can do real work on an iPad, why would you think you could do on a Windows 8 tablet? Unless you're referring to the fact that Intel-based Win8 tablets will have access to the Classic Desktop, which is not does work well on tablets in the first place. ARM-based Win8 tablets are Metro-only and include the classic desktop to only run Office 15, which is the single biggest advantage of ARM-based Win8 tablets.
Don't get me wrong, Win8 looks to be a nice OS and the Metro UI probably works well on tablets, but I don't see them to be much more capable than iPads, at least not for now. Now if you're talking about traditional desktops and laptops then you have to compare Win8 to OSX Mountain Lion.

This. I think Microsoft has had the foresight to recognize that tablet processors are quickly coming up to par with (and exceeding) current gen netbooks. Unifying the core experience by releasing Windows 8 across tablets and PCs both will allow them to capitalize on their measurable advantage in the PC realm in the tablet arena. In the end it's always going to be about personal choice, but I can see Microsoft being a serious contender to the tablet market right away.

Microsoft has tried that unifying experience thing and failed miserably. Windows 8 for PC is too power hungry to have the services we typically rely on to run on a tablet. Win8 tablet will be a more limited experience than the desktop version and there is no reason to believe it will be more functional than an iPad.
With few exceptions, all my work is now done on an iPad. The only things lacking for me are:
- printing to any printer
- Certain specialy apps like Quicken, and Tax Software
- DVD burning (home movies of course!)
- Heavy duty gaming
However, most of these issues are being addresed for the iPad in one way or another (except DVD burning which will become irrelevant)
I don't see major app or printer support for Win8 tablet.

"Win8 tablet will be a more limited experience than the desktop version and there is no reason to believe it will be more functional than an iPad."

Actually, not Microsoft nor anyone else has ever tried this before. BTW, Windows 8 runs very well on tablets and it is not "power hungry" or whatever you meant by this, and there is plenty of reasons to think it will be more functional than an iPad, just like OS X is much more functional than iOS.

Some tablets can do content creation. The iPad can do some, but it's more difficult than with some devices like the ASUS Transformer/Prime...simply because of limitations of the iOS OS and having an on-screen keyboard. Microsoft it apparently looking at copying the idea of a physical keyboard dock to go with some of their tablets WITH a built in battery like on the Transformer, and even having a second CPU built into the keyboard.....that would make their tablets quite powerful when running in docked mode. I can definitely say that when it comes to writing documents, managing e-mail etc. my Transformer runs circles around my friends using iPad 2's. Printing is easy.....there are apps for printing to pretty much any printer out there. But the iPad 2's have a much better selection of games.

It may be that your Transformer Prime runs circles around your friends iPad 2 because, well, no disrespect, but they are not fully aware of its capabilities......
Printing? Print Central, HP Print To Go, etc. there are hundreds of free print apps available. OK, let's move on.
A physical keyboard? Well, then why not simply have a laptop. The concept of the tablet is to not have a physical keyboard, but if you so choose, link up to anyone you wish via Bluetooth. When needed, I use my wireless Apple keyboard.....Next!
And as far as email, documents, etc, I would guess you have never owned an iPad. Just a guess of course. I have never owned another device other than iPad, however I am not in a position to say iPad will run circles around your Prime. Me, I'm good to go with the new iPad.
One Love.

Interesting take on the tablet market. I really can't say how it will shape up over the next few years. It will be different than the PC and SP markets for sure. In what manner though it's hard to say. There are more factors involved this time I think. Such as will everyone even want/get a tablet?

So far, the "tablet" market is shaping up to be more like the iPod market than either the PC or Smartphone markets. iPod has locked up 70+% of the portable music player in the US for years. The same could easily happen with iPad.
Microsoft managed to force all PC vendors to install the same version of Windows 3.1, 98, NT, etc. Google can't or won't do that with their Android hardware partners. The result is a free-for-all between Android hardware vendors trying to one-up each other with UI tweaks. Makes little difference to consumers, but for developers it is a nightmare. (As Mr. de With said, many times, on the most recent episode of Iterate.)
Most Android apps will never reach critical mass because of the multi-dimensional fragmentation between hardware specs (screen sizes especially), Android releases (2.3 at 58.6% Android market share to 4.0 at barely more than 1%), and GUI skins created by the hardware vendors (Amazon's Kindle Fire GUI, Fusion Garage's short-lived Grid 10 GUI, etc.)
And the Android OS itself could end up being controlled by Amazon at the low end and Samsung at the high end, if Samsung forks some version of Android the way Amazon forked 2.3. Samsung is crushing all other Android hardware vendors, and they could further their advantage by creating their own version of Android (and a matching app store) optimized for their own hardware.
The tablet market will be nothing like the Smartphone market either. The Smartphone market exists largely at the whim of the cell carriers. And all they care about is getting more subscribers, selling the biggest possible voice plans, and fleecing Smartphone users for the highest possible data fees they think they can get away with. And only one of those goals is possible with an iPad or any other tablet: the data plan fleecing. Hence there is little incentive for cell carriers to promote iPad or any other tablet. iPad and its would-be competitors will be forced to compete on their own merits, with little if any any subsidies or marketing deals. iPad has dominated despite that, and there is no evidence to show that the domination won't continue.

Except that the iPad lead has already dwindled from over 80% to 60% in just one year. There are just too many competitors on the market, and a tablet choice is much more complex than choosing a music player.
As Steve Jobs said, it's dangerously easy to change brands, but escaping an ecosystem is absolute torture. For the majority of people who own Android smartphones, the logical choice will be an Android tablet, since they already have the apps, have their contacts and calendars on Google etc.
I agree that it will not behave like the PC or the smartphone market, and will have its own dynamic. The end result however will be the same, Apple not having the largest slice of the marketshare but being the most profitable, which is all that matters anyway.

On the contrary,I believe tablet market will be much more difficult for Apple to compete in longer run than SP market. In SP they are forcing carriers to subsidize the cost without affecting their profit margin but in tablet they don't have that luxury. Kindle fire has shown that if decent tablet is offered at decent price then it will succeed no matter what OS (IOS/Andorid/Windows 8) it has. As article said there will not be much difference between these 3 major OS in near future and on hardware Samsung/Asus etc has already shown they can compete and even beat Apple.

The tablet market will be more like the PC market if for no other reason than the tablet market (for the most part) does not rely on carrier marketing carrier sales, or, most importantly, carrier subsidies. People focus on their own budget, and what that tablet can do for them, and decide accordingly. If they love Amazon or B&N content, they get a Kindle or a Nook. If they want the most apps (and can afford it), they get an iPad. Android tablets are statistical white noise at this price point because what they can do that an iPad cannot has not shown much mass appeal. Win8 could be interesting, because it will unquestionably have an entire class of applications and functions that the iPad lacks; the question is, will those functions be usable? If so, Win8 tablets will be a real threat to the iPad. If not, they will be an also-ran.

Wintel crushed the Mac in the PC wars because a) it was cheaper, and b) it did a lot more. MS created a fast, simple way to make applications, and aggressively worked with developers, two things Apple sneered at at the time. People mocked crappy VB and VBA applications, but they served a lot of businesses very well.
There are millions of small businesses out there -- retail, dentist offices, trucking firms, that need a custom app, or just something slightly different than an off the shelf app, and do not care so much about the platform it is on, as long as it meets their specific needs. With its approval process and its denial of interpreted code, the App Store largely forbids this. Yes, it means the iPad has a very high average app quality, but it leaves a very large unserved market for truly custom apps.
It still boggles my mind that Google did not seize up on this, and aggressively court this level of developer with Android tablets and SDK help, in order to create a flood of turnkey vertical solutions. These apps may not be glamorous, but this is the Blue Ocean Apple has no interest in swimming in, and success stories there could result in a lot of leverage down the road.
I doubt MS will make the same mistake, and, with their history of making great tools for the so-called "lower skilled" developer, Win8 could become a player that way.

Will publishers move full force to HTML5 and sell via web apps so they can own their customers (versus Apple owning them)? You can bet the farm on it. It will start with publishers/content creators that have a highly desirable product, like the Harry Potter ebooks, and then slowly trickle down.

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