More Evidence That There’s No “Tablet Market”

By  |  Wednesday, August 17, 2011 at 3:15 pm

All Things Digital’s Arik Hesseldahl reports that sales of HP’s TouchPad at Best Buy aren’t great. In fact, his source says that Best Buy has managed to sell less than ten percent of the 270,000 TouchPads that HP has shipped to the retailer so far. It’s causing Best Buy some angst, Hesseldahl says.

HP’s rapid move to cut the TouchPad’s price apparently hasn’t goosed demand, at least sufficiently: according to an analyst Hesseldahl quotes, consumers think that the price might tumble even further. And so rather than buy a cheap TouchPad now, they’re waiting for even cheaper TouchPads that could be in the works.

I like competition and I like the TouchPad’s WebOS software, so I’m rooting for some incarnation of HP’s product to be a winner that sells well. But it’s not the least bit startling to see it get off to a slow start. The first reviews of the TouchPad–here’s mine–were pretty much unanimously lukewarm at best, pointing out bugs, performance issues, and a general lack of apps. Even if you were intrigued by the TouchPad, the reviews would leave you thinking that it made sense to wait rather than rush out and buy one.

And in environments where the TouchPad competes head-to-head with the iPad 2–like Best Buy–the first impression it gives isn’t helpful: it’s chunkier and heavier. If you bought a particular tablet purely because it was somewhat thinner and somewhat lighter than another model, you’d be making a pretty superficial purchasing decision. But it’s not as if general svelteness is the sole reason to learn towards the iPad.

The TouchPad has some points in its favor. Its WebOS software has some very nice features, like Just Type and Synergy. The interface is generally pleasing. But this is the sort of stuff that’s hard to suss out at an store. And even if you’re impressed by it, it wouldn’t be the least bit nutty to opt instead for the tablet with all the apps.

Anyhow, Hesseldahl’s article is only the latest of many about a non-iPad tablet selling poorly. I’ve seen no evidence to date that any tablet except the iPad is a hit.  We can officially conclude that the strategy followed by a bunch of companies–rush out a half-baked product, and advertise it like crazy–was itself half-baked.

And it leaves you wondering when the success stories will start to kick in that would create the thriving tablet market that research firms are still predicting will come to be. Here are some Gartner projections from April:

As always, I don’t think that the specific numbers in forecasts like these mean anything whatsoever. (Why does Gartner think that 8.886 million WebOS tablets will sell in 2015 instead of 8.885 million or 8.887 million? Or, for that matter, 7.259 million or 9.366 million?) But all of Gartner’s numbers for 2o15 roll into one big one: more than 294 million tablets sold that year. The company thinks that tablets are going to be huge. As does Strategy Analytics: its projection of 150 million units sold by 2015 is less exuberant, but that would still make tablets the third-biggest consumer electronics product after TVs and PCs, according to CNN Money.

I think tablets are going to be big, too. But it’s been nineteen months since the iPad was announced, and the rest of the industry still feels like it’s in dress rehearsal. Samsung’s Galaxy Tab 10.1 is the only non-iPad tablet I’ve seen that doesn’t look a tad out-of-date and/or unfinished. And given the lack of Android Honeycomb apps, even it has trouble with the basic question all tablets must answer: “Why should somebody buy this instead of an iPad?

So let’s just say it: there’s another scenario here. It’s a little like the one that transpired with the iPod: one in which the iPad dominates indefinitely and every competitor squabbles over one tiny piece of the market-share pie. I still don’t predict that. But the longer it takes for Apple’s competitors to come up with products that are plausibly superior to the iPad in ways that matter to meaningful numbers of people, the less sensible it is to rule it out.

And for now, there’s really no such thing as a “tablet market.”


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18 Comments For This Post

  1. Jeremy Says:

    great post Harry. in addition to "why should somebody buy this instead of an iPad" I think manufacturers need to answer "even at your lower price point, why should somebody buy this instead of a USED ipad"!

  2. Name Says:

    When it comes to the HP TouchPad, it's dead in the water. I mean, even if you were willing to go for a non-iOS tablet, you certainly wouldn't go for some strange fringe OS like WebOS.

    You would go for an Android tablet of course.

    Not saying I disagree with the general conclusion here. But when somebody does patch together a decent tablet to compete against the iPad, I sure hope it runs Android and not the other insignificant OSes.

  3. Sal Says:

    There is no tablet market because most of us still need keyboards and the ability to run programs, not just apps. Tablets are fun. They aren't for work. They aren't even all that good for school. Not one college student could survive with a tablet alone (unless they are in the basket weaving department).

    The hybrid touchscreen/netbooks that are emerging show some promise to serve tablet and laptop functions. They are getting more processing kick and ability to load up RAM so real work can be done.

    In the meantime, let's call an iPad what an iPad is? It's a niche luxury good. It's not a necessary tool for the mainstream at all.

  4. Nick Says:

    The EeePad Transformer with the laptop dock seems like something a college student could survive with. Perhaps Honeycomb isn't as useful for productivity as a desktop operating system (yet), but the addition of a keyboard in a convenient form factor certainly helps.

  5. Tom Ross Says:

    You should not mistake what’s shown in early marketing campaigns for the limits of what tablets are technically capable of. Tablets can run 90 % of the software PCs can run (plus some PCs cannot run). The problem is just that the software is not there yet. But that will change over time as the installed base grows. You will even be able to get through college with an iPad (and a Bluetooth keyboard).

  6. Thomas Traub Says:

    I am so glad that the people finally refuse to buy half baked stuff.

  7. Tech84 Says:

    It's because nobody is buyingHP's touchpad, almost everybody else is getting the iPad or Samsung's Galaxy tab.

  8. Reece Tarbert Says:

    The TouchPad is been out for a little over a month and that's enough to declare it a failure?

    And more to the point: why is everybody so keen on quoting a "report" that offers no evidence but "sources familiar with the matter", "a second person who has seen Best Buy’s TouchPad sales figures" and even the customary "sources familiar with the matter"?

    I don't care much for the TouchPad or tablets in general, but this is NOT journalism — and AllThingsD is not the Associated Press.


  9. Reece Tarbert Says:

    Please replace: the customary "sources familiar with the matter"
    with: the customary "sources tell us"


  10. Gerry Says:

    I gave up on HP doing anything software related when I overpaid for their media storage system, that they half halfheartedly supported software updates for. And their TX2 tablet, that I paid a premium for, that never had any software updates for their touch screen capability. It seems like they treat everything like a printer one or two minor updates and that’s it. So as an early adopter I never considered their offering after their poor past performance on a standard windows operating system let alone an totally new operating environment.

  11. Fred Says:

    I sure hope the tablet market doesn't shake out like the MP3 player market. Innovation in the iPod line was really anemic until the iPod Touch came around. Apple is no different than any other manufacturer – they're not going to dramatically improve a product that has no competition. It's for this reason that I really don't understand iOS users that cheer Android's missteps. Competition is always a good thing, and a market is not a horse race.

  12. Tom Ross Says:

    I’m not so sure if Apple’s performance with the iPod was an example of monopolistic laziness. They competed really hard to keep the top spot. iPod mini in 2004, iPod shuffle and nano in 2005, iPod Touch in 2007. And they offered us several years of dramatic price drops. You could basically count on it becoming $50 cheaper every September. I think that was pretty consumer friendly.

  13. mejoff Says:

    "I really don't understand iOS users that cheer Android's missteps"
    Because the apple offering is a set of products that is sold as a lifestyle, and treated by many of its adherents as a religion.

    The Jobsian views any issue that emerges for an Apple competitor as vindication of their faith, and looks forward to a world where no competitors exist and everyone shares their beliefs.

  14. Dave Says:

    Tablets are media consumption devices more than phones. That is why the iPad will continue to be popular. You can't get away with web browser, twitter, facebook, and a few games like you can on a phone.

  15. shawn Says:

    an old economics joke can be applied here, to forecasting in general (see Harry's point on "forecasting"):

    "how do you know macroeconomists have a sense of humor?"

    "they use decimal points."

  16. genomega1 Says:

    Best Buy may not be a real indicator of sales. Many of us no longer shop with them since they changed their policies and no longer stand behind the products that they sell.

  17. Patricia Miller Says:

    I work at a teaching hospital – who ever said iPads aren't for work has never seen the creative and "Even I didn't see that coming" kind of ways the faculty and students are incorporating iPads into training and patient care. I use mine to remote into my Windows box, some faculty use them for call. We had two Android tablets purchased by die-hards who didn't want Apple – they were returned in a week.

    There are certainly valid reasons for Androids, but overwhelmingly, the users prefer the iPad.

  18. zahidpro Says:

    The hybrid touchscreen/netbooks that are emerging show some promise to serve tablet and laptop functions. They are getting more processing kick and ability to load up RAM so real work can be done.
    tv stands for flat screens