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:
- 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.
- 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 TED.com 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.
- Tablets (and smart phones) could become the control point for home automation systems
- 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
- 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?