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Apple TV

The Future of the Tablet

CES 2011: Tablets

The Ups and Downs of Replacing a Notebook with an iPad

CES 2011: New Products

CES 2011: 3D Assessment

CEA put its forecasting hat on and presented interesting data on the market and trends around smartphones and tablets. Here is a summary of some of the points made by CEA in its evaluation of the market for smartphones and tablets.

During the talk CEA speculated that there is likely to be competition between the carriers on broadband data plans, even including competition on pricing.

Assessment

We question if the Tablet forecast, where the market peaks out in 2013, reflects the likely market dynamics. As discussed in earlier reports some of these factors include:

Increasing emphasis on application specific tablets. The eReader is just one we see today but there will be many more. This will trigger the purchase of multiple tablets per household. Today some households have both an eReader and a tablet and this proliferation will accelerate as the tablet variations grow.

Continuing erosion in price. We estimate that a quality tablet will be on the market for <$100 at the end of 2011. The tablet market is likely to be highly elastic, at least in the early years and the analysis does not seem to reflect this.

Rapid obsolesce of tablet generations. The market pace will be such that last year’s tablet is seen as dead weight. The innovations will be in software, application specific tablets and price. Tablet innovation velocity will not be bounded by Moore’s Law. The biggest innovation area, in terms of cost and performance, will be in the screen.

A major uncertainty in the tablet market is the role of the carriers. The more tablets which are sold by them the greater the likely barrier in the market for rapid growth. Using artificial pricing, contract lock-ins, controlled platforms and preloaded junk the carriers could be a force which retards an open market. CEA’s speculation on competition for data plans between the carriers is good news, if it happens. However, the carriers have shown negative innovation on the pricing and marketing of data plans.