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3 minutes reading time (512 words)

Is Apple about to lose the Tablet Market?

Today Huawei announced an Android based tablet with impressive specs. A little thicker but lighter than the iPad, the newly announced tablet beats the current iPad2 in sheer hardware specs. While Apple stubbornly continues it’s policy of controlling every aspect of device development and marketing, Google is allowing ODMs to accelerate the pace of device development and developing the software to keep pace with these developments. We have seen this before – with the PC market. While Apple kept pushing the envelope on PCs, they failed to take advantage of the growing demand for PCs. That void was ultimately filled by Microsoft who took on the role of a fast follower and successfully created the eco-system around DOS, Windows and Intel based PCs. As the tablet market grows globally, is Apple doomed to repeat the mistakes of the past?

To be fair the two situations while similar are not exactly the same. When the PC market took off, Apple did not have a dominant share like they do with the tablet market today. In other words, it wasn’t Apple’s market to lose like it is now. That said, the growth rate of the tablet market is far greater than the growth rate of the PC market so the risk of not
being able to satisfy that demand is very real. As market demand expands companies such as Samsung, LG, HTC and traditional PC makers will attempt to satisfy that demand with a flurry of products. As market demand expands, the one size fit all strategy currently followed by Apple will not be effective. While nobody expects Apple to sit still, Apple will need to accelerate product development and manufacturing but it is unlikely that any one company will be able to satisfy that demand. This opens the door for alternatives and especially for Microsoft who is well poised to take advantage of this growth starting with
the release of Windows 8 in 2012. This begs the question – will Apple be relegated to a minority status as the market grows around it?

Another difference between the PC market and the tablet market is the dominance Apple has in the apps space. But is that dominance overstated as the world moves to Cloud/web based applications? Sure there will be a lock-in effects for some types of applications – those that use specific hardware features but we expect the vast majority of applications to be platform neutral at least in terms of their consumption. The popular game Angry birds is a good case in point which started out as an iPad application but is now available to
users of the Chrome browser as a web app. If the vast majority of applications are in fact web apps then how will Apple (or for that matter Microsoft and Google) continue to gain leverage so that new consumers for tablets will choose the iPad over other alternatives. That leverage could come from new, better hardware and from expanding the product portfolio. Both of those things are happening outside the Apple universe right now.

Abhijeet Rane
Techaisle
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