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Summary:

Of all the wireless devices that have hit the market in the past several years, tablets present the biggest commercial opportunity for media…

A look at photo capabilities in the iPad
photo: Apple

Of all the wireless devices that have hit the market in the past several years, tablets present the biggest commercial opportunity for media owners, in terms of what consumers are willing to pay for and consume on the devices. But for now, that opportunity is, at best, a mid-to-long-term one. Research from Nielsen — being presented for the first time today at the paidContent Mobile conference — shows that in the U.S. today, more than 95 percent of consumers have yet to buy one.

Despite the huge amount of hype that has surrounded the iPad and the many other tablets hitting the market — they include Android-based devices, the recently-launched Playbook from RIM (NSDQ: RIMM), and the soon-to-come TouchPad from HP (NYSE: HPQ) — the researches note that as of Q1 2011, only 4.8 percent of the roughly 12,000 U.S. consumers surveyed have bought one. That number is likely even smaller in most other markets, even developed ones. Paul Lee, an director of TMT research with Deloitte in the UK, estimates that in the UK the number of tablet users is 1 out of every 60 people — or 1.7 percent.

That puts tablets, for the last year at least, behind every other wireless device category for the moment for penetration; and also behind most other devices in terms of how fast they’re getting adopted:

On the positive side, low penetration represents a big opportunity ahead for those device makers not named Apple (NSDQ: AAPL), which currently controls more than 80 percent of the tablet market, according to Nielsen.

And it also spells good news for those retailers that can sell at smaller margins and make a killing on volumes. We are already starting to see some of that happen now: just today in the UK, the retailer Asda (owned by WalMart) launched a scheme selling the seven-inch, WiFi-only Samsung Galaxy Tab for £277 (just under $450), “the lowest price on the market in the UK,” according to a release from the company. Asda has priced a further five other tablets at under £100.

Those consumers who have started to use tablets, meanwhile, are definitely living up to their name. They watch more video and read books; are more accepting of advertising and are more likely to make a purchase after viewing an ad, than users on smartphones or other devices.

Nielsen’s survey also showed that tablets had the highest proportion of people using the device while watching TV: 70 percent. That bodes well for those services like GetGlue that converge the online experience with that of watching TV. The next-highest simultaneous TV usage was with smartphones — which proved to be the most-used device in almost all other scenarios presented by the researchers (the exception was bed, where eReaders won out).

These numbers could be a by-product of the fact that those using tablets today are early adopters, and therefore more keen, than the mass market. But if they hold up as the market grows, tablets could be the window to a new model of paid digital content.

  1. “Research from Nielsen—being presented for the first time today at the paidContent Mobile conference”

    Wherever you see the words “paidContent” you can read as “Microsoft”. 

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  2.  “Nielsen” should be read as “Microsoft/Nielson”

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  3.  “And it also spells good news for those retailers that can sell at smaller margins and make a killing on volumes.”

    This seems to be the new anti-iPad strategy – overwhelm the iPad with a blizzard of cheap junk tablets. 

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  4.  MoCo News should be read as: Microsoft Controlled “News”

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  5.  W/more tablets and smartphones being used by TV viewers and receptive to advertising, seems to be great opportunity for TV advertisers to supplement TV buys on the growing number of second screen apps on such devices

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  6. Actually, its the paid content that is holding up adoption of all mobile content.

    See the internet generation is not as stupid as big business thinks they are. we pretty much know that its the same internet, even if it is coming to us by wireless.

    I am not willing to pay for something on a tablet that I would not pay for on my PC.

    Get that through your heads and accept that advertising will continue to make you a little money and move on with this.

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  7. This report suggest that the Kindle is outselling iPad.
    This contradicts previous reports, se here: Ereaders Outsell Tablets Twice Over While Kindle Outsells iPad
    Does anyone have a link to the details.

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  8. Hi Sammy: Thanks for your comment. First of all, there are other ereaders beyond the Kindle, and secondly this has to do with adoption rates and not sales figures (eg 4.8 percent of respondees said they had a tablet in March). But if anything these numbers confirm those in the link you have above: the higher adoption rates for ereading devices is a consequence of them selling better, as an overall category.

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  9.  Has Amazon ever even released hard numbers on the number of Kindles sold?  How are they determining that?

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