Four years ago, when Apple introduced the first iPad, a lot of commentators wondered what people would do with the newfangled gizmos. The iPad was a slick new media-consumption device but it wasn’t very useful for creating, sharing or remixing content, or much of anything besides passively listening, watching or reading — activities that could also be done with the smartphone, laptop or PC most people already had.
Sales quickly took off anyway, however, making the iPad one of the most eagerly adopted high-tech products ever and forcing competing hardware makers and OS providers to respond with tablets and tablet-optimized software of their own. People quickly stopped wondering (or at least asking aloud) what anyone would do with a tablet.
As abruptly as tablet sales took off they’ve started to slow, however. With its earnings report this week for its third fiscal quarter (ended June 28th), Apple posted its second straight quarter of falling iPad sales. Unit sales were down 9 percent in the quarter, after a 16 percent drop in fiscal Q2.
It’s not alone. Samsung, the leading Adroid tablet maker, also posted “sluggish” tablet sales in the quarter, while Microsoft cancelled plans to bring out the Surface Mini, a planned 8-inch version of its flagship Windows tablet. In May IDC lowered its 2014 sales projection for the entire category.
To be sure, even IDC’s lowered projection reflects year-over-year growth in the category for 2014. And as Kevin Tofel pointed out on GigaOM, even at the current, slowed pace of sales the iPad is still generating $5-$10 billion in revenue per quarter for Apple — the sort of problem a lot of companies would love to have.
Yet it’s hard to escape the sense that tablets have hit a plateau as a device category. They’ve settled into a nice-to-have but not need-to-have niche, offering an alternative form factor for functionality and applications that largely duplicate those of other devices, sometimes doing it better than those other devices and sometimes not as well. Four years on, the industry is still groping for a compelling answer to the question of what a tablet is really for.
Microsoft’s response has been to position its Surface Pro tablet as a replacement for the laptop, equipping the Surface Pro 3 to run a full version of Windows and a full suite of productivity software. But that’s not an answer so much as a rephrasing of the question: If a tablet is a replacement for the laptop than it’s not really a distinct category of device, is it?
Even Apple, which once mocked Microsoft’s efforts to straddle (or erase) the line between laptops and tablets, is now flirting with adding more laptop-like functionality to the iPad, partnering with IBM to sell iPads loaded with new productivity apps to enterprise customers.
Samsung’s strategy seems to be to ride Apple’s coattails at a lower price point, while Amazon is selling its Kindle Fire tablet as a loss leader as part of a broader e-commerce strategy, which isn’t so much an answer to the question as a refusal to acknowledge it.
The real problem for tablet makers is that the power to implement some of the most compelling potential use cases for the devices is not in their hands.
A tablet is an optimal TV Everywhere device, for instance. But TV Everywhere is far from an optimal experience at this point for most consumers. If it were possible to access all the programming that can be accessed today with a TV and a set-top box using a tablet, including live, time-shifted or on demand content, on a retina or 4K screen, through a single interface, it would add greatly to the value of owning a tablet. Moreover, a tablet makes a better mobile TV than either a phone, due to the larger screen size, or a laptop, due to a tablet’s easier mobility and touch-driven navigation, giving tablets something like a native functionality that couldn’t easily be replicated on other devices.
But while tablet makers may wish for such a scenario wishing is about all most of them can to do to bring it about at this point. The future of the mobile TV ecosystem is in the hands of rights owners, service providers, wireless carriers and others in the value chain. Ditto gaming. Native support for Xbox or PlayStation games on a tablet would be a very compelling feature, turning tablets into a mobile extension of a game console. But it’s not a feature tablet makers can unilaterally add to their devices.
Tablet makers, in effect, have already done their part for the mobile TV and mobile gaming ecosystems. Now they can only wait for others to do theirs.