Mass Market or Niche Specific - What a Tablet Needs to Succeed

I’ve said it before and I’ll say it again – 2011 is going to be an interesting year. No one really knows where the tablet market is likely to take us and as a result, a lot of people are trying to guess. Just the other day, NDP Group threw out one of the biggest numbers I’ve seen yet – an estimate of more than 242 million tablets by 2015. Do I think it’s possible? Absolutely. Do we know for sure that it will happen? Not quite. And yet, part of the fun right now is trying to determine exactly where this tsunami of new technology will take us.

Will Apple dominate for years to come as they did in the portable music player niche? Or will then become one of many high profile players in the market as they did with their iPhone? Will Motorola make a strong debut at the end of the month despite a $799 price point on the Xoom? Or will then struggle to get a foothold against a less expensive, more ubiquitous device in the Apple iPad?

Right now, a lot of analysts are worried about pinpointing who can compete directly with the iPad. Maybe there isn’t a direct iPad competitor, but do we really need one anyways? The iPad fulfils a niche need. Despite its incredible sales numbers in 2010, the device cannot replace a desktop or laptop computer for heavy users. In fact, like many Apple products, the iPad is designed to provide the creature comforts of computing in a sleek, well-constructed frame. It is attractive, it is easy, and it has a LOT of Apps and media.

Other devices do not yet have these features, but that may be okay because in a market that is currently hurdling toward the future, the next big question should probably be “who can deliver the best device in each niche?” not who can provide another mass market device.  

Companies thrive and customers win when the focus is taken away from trying to please the most possible customers instead of playing to strengths and developing a device that does specific things very well. And while devices like the Xoom and TouchPad look incredibly attractive, their success hinges largely on the ability of retailers and the manufacturer to market toward a tech-savvy niche of users who want more power in their devices.

How to Establish a Niche in a Growing Market

I don’t think no one stands a chance as a mass market manufacturer. There will surely be at least two or three very strong devices in the next two years that rise to the top of the field for Android and Windows tablet computing. But, as the tablet market moves forward, I think we will also see a strong shift in focus toward creating niche devices that serve more specific needs.

Even Apple has done this in the past with their Mac OS as Windows took and held a huge lead in the home operating system market. If you cannot be the biggest fish in your pond, find a smaller pond. Apple did that with schools and creative professionals.

And right now, I’m as excited to see what manufacturers do with medical devices and enterprise integration on tablets as I am to see what the next mass market entertainment-focused tablet can pull off. Convertible tablets, 3D based tablets and many more are drumming up interest right now and it’s a good thing. The more companies are willing to seek a specific niche in which they can excel, the more varied and advanced tablet technology is likely to get.

But for now, we are likely to see things shake out a bit between companies like Motorola, HP, LG, and Asus. Apple may have taken the crown in 2010 for mass market device of choice, but there are a lot of alternatives in 2011 hoping to give them a run for their money. 

Getting Behind the Tablet Sales Numbers

One thing that a lot of tablet PC prognosticators like to do is gauge and measure the market, either while a device is available or weeks to months ahead of its launch. So, when we do get data, inevitably it will be thrown around a dozen different ways before we understand what it really means.

Sometimes, numbers are simple. Estimates of more than 13 million iPads beings old seem realistic considering the demand for the device and the capacity at most retailers. However, the numbers for the Samsung Galaxy Tab, which reported to have sold 2 million units, are not quite the same. Usually, statements like this mean “2 million shipped to retailers” not actually sold to end users. We don’t know how many that means, but company statements have already tempered it quite a bit.  

Measuring the Future

What does that mean for companies that have a new device coming out in 2011? What does it take to create a mainstream device and how does the public generally respond to certain features? No one knows. In fact, right now, the only devices on the market to draw data from are the mega-selling iPad and a dozen or so smaller devices with varying reviews and sales numbers – none of them with outstanding selling points.

I think that niche devices like the Playbook will actually sell decently well to their respective markets, though whether they can be mega-sellers in the mass market remains to be seen. I also think that there will probably be at least one other breakout device in 2011 – most likely the Xoom, though LG’s new tablet is starting to look very attractive with the announcement of multi-carrier 4G support and 3D playback.

We have no idea what will drive end-user interest. Reviews, technical specs, and usefulness have never really been the determining factors in what sells in the technology industry. Apple’s products are never the most powerful or the most feature-rich – they are often the “coolest” and that works for them. So, to be successful, does a company need to “out-cool” Apple or can they simply find their way into the niche through a variety of highly useful, mass-market features?

It remains to be seen. But, I have a feeling in 2011 we’ll be doing a lot of number parsing as sales numbers like that of the Galaxy Tab start to pour in. 

And the Numbers Are In...

Just yesterday, IDC released numbers for Q3 sales of tablets around the globe. As expected, those numbers were very good and as expected, a good percentage of them were iPads. Specifically, the numbers show that Apple made up nearly 90% of all tablets sold in the quarter with 4.2 million sales (of 4.8 million total shipments).

Of course, that’s the not the number I’m most interested in. The final numbers for total shipments in 2010 is expected to be roughly 17 million (once Q4 numbers are finalized) and a lot of those will be iPads for sure (though the Galaxy Tab made a nice run at the end of last year). But, it’s the prognostication for 2011 and 2012 that really draws my attention. IDC has pegged the 2011 market to be somewhere in the vicinity of 44 million tablets with 2012 expected to sell more than 70 million.

Of course, no one company could maintain numbers like that alone. Just like with the smartphone market which saw a huge surge in popularity with the iPhone, but ultimately gained most after Android was released, the tablet market looks ready to explode on the precipice of a widespread Android 3.0 rush.

It’s not just Android and manufacturers like Motorola and Asus that are pushing the market, however. Yes, Apple will have a new iPad available soon – probably in April – and it will likely sport at least 80% of the upgrades that Apple’s customer base has been driving for (the usual almost everything upgrade). But, there are also newcomers slated to hit the market soon, including RIM with their Playbook, HP with WebOS, and the newest versions of MeeGo. Windows tablets are still a tossup with third party extension being absolutely necessary at this point to drive any kind of innovation in those devices, but even so, by the time 2012 rolls around, we might be looking at the first Windows 8 tablets.

It’s amazing to see the growth we’ve seen in only the last 9 months. A year ago we were prognosticating that the tablet market might take off any time and Apple’s new device seemed like a tossup – it could be popular…or it could be a flop. And yet, with the iPad wedging open a new market and millions of consumers turning their attention to this burgeoning market, we are getting ready to enter a completely new era in mobile technology and personal devices.

I’m interested to see where it leads us – not just in sales numbers (these companies could sell anything), but in the actual real world uses of those products. How will they impact our lives in the two or three years to come and how will they affect the way business gets done? Those are the questions I am most excited to have answered.