Can Anyone Really Compete With the iPad?

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A few months ago I said there was still plenty of room in the tablet market despite the runaway success of the iPad. But no real threat has yet come to market, and I’m beginning to wonder if anyone else can make a dent in the tablet space anytime soon.

The iPad continues to gain ground. The Register insightfully noted that the 4.19 million units sold represented a 28 percent increase over the previous quarter. And iSuppli last week upped its forecast for fourth-quarter iPad sales, saying component-availability problems are improving.

The device still has its flaws — no Flash support, mediocre integration with Microsoft Office and a lack of true multitasking functionality. Some of those shortcomings will surely be addressed in time, however: An upcoming version will have a camera for FaceTime, according to Goldman Sachs, a new version of iOS due next month will support multitasking and the emergence of HTLM5 will eventually solve the Flash problem.

An even bigger key to the iPad’s success is that it can replace lots of minor devices. It serves as an e-reader, mobile gaming system, digital photo album and portable media player, in addition to being a great device for browsing and running all sorts of other apps. And it’s intuitive enough that anyone from my four-year-old to my great-grandmother can pick it up for the first time and use it successfully.

Perhaps most importantly, the device’s starting price of $500, though it’s surely kept some would-be buyers away, is now something of a standard in the minds of consumers — just as iTunes’ 99-cent songs set the bar for music retailers.

Why is the latter point so noteworthy? Because potential competitors are stumbling to gain a foothold in the market with less attractive devices and sky-high price tags.

Lenovo last week decided to postpone the launch of an Android-based tablet until a few months after Google trots out Honeycomb, an updated, more tablet-friendly version of the mobile OS that may not appear until the summer of 2011. Lenovo’s decision follows a similar move from LG, which just a few weeks ago said Android 2.2 — known as Froyo — isn’t “the most suitable” version of the platform for an LG tablet. Both moves come a month after a Google executive conceded Froyo “isn’t optimized for use on tablets” and that apps from Android Market “just wouldn’t run” on an iPad-like gadget.

Meanwhile, the few tablets that are trickling to market seemed destined to be niche products, if not outright flops:

  • The Samsung Galaxy Tab from Verizon Wireless may not be DOA, but its $600 price tag surely won’t sway many would-be iPad buyers.
  • Dell has yet to disclose sales figures for its $550 Streak, but the Android-based device hasn’t attracted much attention.
  • The HP Slate 500 boasts some attractive features and is wisely being targeted at the enterprise set, but at $800 it will be a tough sell.
  • Research In Motion’s PlayBook may attract some business users; its seven-inch screen all but ensures it won’t find a market among mainstream consumers. And while RIM has yet to disclose a price, the PlayBook is likely to sell for far more than the iPad.

Pricier gadgets may succeed if they’re aimed the right niche — especially in the enterprise, where the form factor may be ideal for workers in the field, or for filling out online service orders. But to succeed in the consumer space, it seems that price-point could make or break a device. There are a handful of manufacturers wisely targeting budget-conscious users with less-expensive (though, perhaps, inferior) devices. Archos is building out an impressive line of gadgets that start at $100 and top out at only $300. Asus is taking a similar tack with $300 and $400 tablets.

When it comes to the mainstream tablet market, though, Apple will dominate the space at least for the short-term. So while the long-term market is full of opportunity for all sorts of players, manufacturers looking to compete now should either go niche or go cheap.

Question of the week

Can anyone make a dent in the tablet market in the near-term?

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