Nikkei Electronics Asia --September 2010
Cover Story: Tablets Are Not PCs [Part1]
Set to Surpass the Netbook Market in a Few Years

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Aug 31, 2010 23:56 Toshiyuki Omori, Phil Keys, Yasushi Uchida

Apple Inc. of the US created the whole new "tablet terminal" market with the release of the iPad in the US in April 2010. Before release, some people in the industry downplayed the table, saying there was nothing new about the form, and predicting that while it might draw some attention, it wouldn¡Çt sell. Well, they were wrong: only a month after release it has already sold over a million units, soaring to three million in the first eighty days. According to survey firm DisplaySearch, global iPad sales in 2010 will hit about 9.7 million units, with Japan accounting for about 460,000.

The pace seems likely to continue into the future. The graphs show DisplaySearch estimates of shipment volumes for netbooks and tablets. In 2013, tablet shipment volume is expected to hit about 45 million units worldwide, finally surpassing netbook shipments (Fig.1 ,Fig.2).

Fig.1 World-wide market-45 million units
A "netbook" here is defined as a mini-notebook PC with a screen size of 10.2 inches or less, which is not a tablet. Based on data courtesy DisplaySearch. Fig.1 Healthcare Services Gaining Momentum
Fig.2 Japanese market
A "netbook" here is defined as a mini-notebook PC with a screen size of 10.2 inches or less, which is not a tablet. Based on data courtesy DisplaySearch.

Another crucial point in the DisplaySearch forecast is that of the 45 million tablets shipped in 2013, about 95% are expected to be iPads (or successors). And this even though 2013 is three years after initial release! The company did add a precondition, though: given that competitors do not change from the present business model based on selling hardware.

What exactly does it mean to move away from the hardware-based business model? That is exactly why the iPad has been so successful, and is a crucial key for companies hoping to compete against it. It is, in short, a break with the conventional business model used by the PC industry, a break that is only possible because the iPad is not a PC.

This time we take a closer look into just how manufacturers might be able to compete with the iPad in the high-growth tablet market.

Continue to the next part