Tablets: the next netbook or a true rival to PCs ?

The iPad was clearly “the product of the year in 2010” with 12-14 M units were sold in within 9 months of launch. As a point of comparision, 33 M netbooks and ~325 M PCs were sold in 2010. Furthermore, with every major computer, mobile and consumer electronics company launching a tablet at CES, the category is set to explode. Many analysts predict that more than 50 M tablets will be sold in 2011 with the iPad continuing to dominate, with 60% + market share.

Given its success, the iPad has clearly created a new category in the computing ecosystem. The broader question is how will it impact the rest of the ecosystem ? Here is my take:

  1. The iPad will further weaken the Wintel monopoly. If you consider tablets, PCs, and netbooks as a single category (which I believe one should), then Apple will be a top 3 computing device vendor in 2011. Equally importantly, most competing tablets are being designed around the Android/Chrome OS which is likely to make a further dent in the Windows market share.  Tablets have also enabled Nvidia, TI, Qualcomm and other ARM based chip vendors to take share from Intel.
  2. Tablets +4G will dramatically increase internet, especially video, consumption. While I have no hard data to this effect, my experience has been that tablets significantly increase digital media consumption, especially video, even for existing PC users. For example, with days of getting a tablet, my mother in law become a Netflix addict, and started use the YouTube and apps to see short clips. And even die hard newpaper/magazine readers are starting to read on tablets.
    PC based “digital home” and interactive TV (think Current TV) models have failed as most consumers don’t walk around with notebooks in their hands (I can’t imagine why not!).  Tablets and smartphones could change that paradigm. 

    1. Tablets (and smart phones) could become the control point for home automation systems
    2. Companies like Peel are enabling consumers to discover TV content on their tablets/smart phones, socialize with friends while watching TV and more easily integrate on-line video into TV experience. This is great news for Netflix, Hulu, and other online video service providers
  3. Tablets, and not PCs, will be the primary computing device in emerging markets. PCs are an intimidating, expensive and inconvenient (especially if you have small homes) experience for consumers who want to merely consume content. This coupled with the lack of internet access has stifled PC penetration in markets like India and Africa. Low cost 3/4G enabled tablets have the potential to change this paradigm. For example, Reliance Infotel is planning to launch a $ 200 4G tablet with data speeds greater than 1 Mps in India later this year. As others follow suit, I  think that there will soon be 100s of millions of consumers in emerging markets for whom a 3/4G tablet is their primary computing device. In fact, I think that its possible that even small business, will adopt tablets. For example mom and pop stores that do not use PCs today might start to use tablets as a substitute for POS terminals, while also use them to run basic accounting and inventory management applications.

To sum up,  I think that tablets will rival PCs as the computing device of choice with significant implications across the technology stack  (just think about the impact of Windows market share falling to less than 50%). What do you think?

About Ashu

General Partner with Foundation Capital. Areas of interest range from digital media, mobile and internet infrastructure to all things related to India. Currently on the board of TreeHouse, Aspire, Conviva, Agni and TubeMogul.
This entry was posted in India, Internet. Bookmark the permalink.

24 Responses to Tablets: the next netbook or a true rival to PCs ?

  1. Pooja Malik says:

    Ashu, interesting post. I think one other aspect to consider is the usage of tablets in the enterprise context – Sales force productivity, retail store management etc. Would this have implications for RIM as well?

  2. Ashu interesting question. Because of their form factor, tablets are more natural in number of scenarios like recipe lookup in kitchen, reading etc.
    some of these scenarios will lead to specialized integrations and apps…I think this is going to an explosive area of innovation in the coming years.


    • Josue says:

      התקנתי את הפייסבוק, אבל זה כמו באייפון.איך אני משנה את זה?עידן 25 ביולי 2011, 18:06 עכשיו הבנתי, צריך שהאייפד יהיה פרוץ בשביל זה.אלכס 25 ביולי 2011, 18:10 למה פרוץ ? זאת אפליקציה רשמית של פייסבוקגם אני אגב לא מוצא אפליקציה לאייפד רק לאייפון מצאתיעידן 25 ביולי 2011, 18:19 כי אתה צריך להיות בעל גישה לקבצים באייפד.הנה מדריך קטן :כל מה שאתם צריכים הוא אייפד (כמובן) פרוץ (JB), אפליקציית פייסבוק לאייפון אותה תוכלו להוריד מהמרקט ואת אפליקציית iFile מהסידייה או את ה iphone exleorpr שבעזרתו תוכלו לגעת בקבצים על גבי האייפד.פתחו את אפליקציית iFile ונווטו ל var/mobile/Applications . שם מיצאו את ספריית הפייסבוק שלכם והיכנסו אליה.מיצאו את הקובץ info.plist והציגו אותו.ליחצו על UIDeviceFamily ושנו את הספרה “1” לספרה”2″.צאו ובצעו respring.אלכס 25 ביולי 2011, 19:26 תודה

  3. Rahul Sood says:

    Ashu, Happy new year to you and Pooja.

    Interesting point of view.
    You are right on the money that tablet, ipad and pc are really a single category. the distinction already seems artificial and in times to come, it will only get more irrelevant.
    2 thoughts – one on the consumer and second on the enterprise uses of tablets/netbooks.
    First the consumer, clearly majority of the initial success of ipad is on the home front. The one thing that ipad will have to fix is support for flash to make the online experience as rich and fulfilling for the consumer. otherwise i see my wife switching back to her old mac note book pretty soon.

    On the enterprise side, ipad has had limited success, in comparison to the consumer market. Apple has not released any figures of the % of the 14M sold into the enterprise (not sure if they even track it). My own company has been an early adopter and has a few thousand ipads since Q3 2010 (in a total PC population of 50k). majority of the initial users are content “consumers” rather than producers (except for email – although one could argue that is the main content engine in the enterprise). Sales and executives are the main functions/roles so far. its interesting to note that the ipad is not a replacement of the PC (so far) but an additional device. IMHO the main disruption on the enterprise side may not be the current (announced) set of tablets but Chrome-droid based machines that will not just displace the PC as the computing device but would also (dis)place the traditional OP computing stack (OS, DB, servers, Anti-virus, Apps, DW ….) in the cloud.

    • Maddy says:

      this propagation as it was ssnuet. It’s noneffervescent a 9.7-inches of LED IPS body. It’s works 1024 768. It’s console 4:3. It’s solace silken. And none of that is a disruption. 9.7-inch is the filler Apple brought to the terpsichore, the filler all their apps and all App Accumulation apps are designed for (in position of UI interactivity how big a add has to be, for model) and the situation they’re sticking with. At 9.7-inches 1024 768 is nowhere moral Retina Showing equivalent iPhone 4 or iPod touch 4 gained last year, but until Apple can germ panels that are cheap enough and plentiful sufficiency at incisively backup the spacing 2048 m1536 there’s truly no opposite deciding. In terms of ratio, 4:3 is plant the most syntheticalprize for a multi-media gimmick. 16:9 or 16:10 is zealous for incisively one target, HDTV. For the aforesaid saneness cooperation it mechanism for fast genre displays like on laptops or desktop screens. For a pattern that rotates same an iPad, however, it’s far too strait in portrait for web or representation and works not dogmatic enough in genre for most proposal pictures.There’s no specified noetic for holding the like dismantle of wordbook. Certain it makes for really black blacks and looks great in stores but it also makes measuring thorny in umteen popular illumination situations. They don’t change to go mat and I wouldn’t necessary them too because I equal those black blacks for photos and recording but my eyes would appreciate their movement the reflectivity land honourable a cut.The aluminium urgency and the bezel surrounding the strainer are ever-so-slightly smaller. (Two of our body, Colony and Leanna rhythmic, believable with molecular telescopes). And this period the bezel comes in the synoptic black as stylish twelvemonth, but also comes in color. Yes, Apple managed to board a discolour iOS pattern (enclose your iPhone 4 jokes here). No LED winkle and no proximity sensor power but someone prefab it an easier manufacturing transmute but whatsoever the understanding it was announced as transport from day one and ship from day one it did. Does a colorless bezel cause vexatious reflections or create the fancy of change counterpointpatch watching videos or performing games? Not that Georgia, Leanna, or I detected. Black is belike the quality of choice for cinephiles and hard core gamers but I question any mainstream user present get too frightfully offended by someone.

  4. Ashu says:

    3 observations:
    1. the flash issue will go away with HTML 5 getting more adoption/support. and Android tablets will all support flash
    2. Enterprise adoption of the iPad is just starting with the latest iOS release which supports remote printing, etc. Several I-banks have given out iPads to all their employees in Dec. and several pharmaceutical companies are testing i9Pad for sales detailing/order collections. and this is just the start…
    3. Your point about the impact on the entire computing stack is spot on. The fun is about to begin!

  5. anoop agrawal says:

    Hey Ashu!
    Nice informative discussion.

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