UIEvolution Blog.

2011 was expected to be “The Year of the Tablet.”  CES seemed to confirm that belief in January, as over 100 new tablets were unveiled as challengers to Apple’s iPad.

Motorola’s powerful Xoom led the way among Android tablets, boasting a 10.1” display powered by a dual core 1 GHz processor running Honeycomb, the first version of Android designed specifically for tablets.  RIM’s BlackBerry PlayBook was also a favorite, packing 4G power and HTML5 support into a 7” format.

Behind the leaders ran a pack of largely interchangeable screens of various sizes running versions of the Android OS that were not designed for use on tablets, but Xoom and PlayBook were expected to challenge Apple’s dominance of the tablet market and to expand that market by attracting Android and BlackBerry owners who didn’t want to fragment their personal technology portfolio by purchasing iPads. HP announced the TouchPad in early February, adding a webOS alternative.

Apple reshaped the tablet landscape again on March 2nd when Steve Jobs unveiled the iPad 2.  It boasted a 1GHz dual-core processor, in a case 33% thinner, with front and rear facing cameras, for the same price as the original iPad, which was several hundred dollars below the originally announced price for the Motorola Xoom. The iPad 2 was labeled “evolutionary” rather than “revolutionary” by analysts, but it neutralized many of the advantages competitors had been counting on to lure tablet buyers away from Apple.

The iPad 2 hit store shelves on March 11th, before either Xoom or PlayBook had a WiFi option in market.  iPad stock didn’t last long, with Apple selling an estimated 400,000 to 600,000 units in just three days through Apple stores and various retail outlets. Surveys suggested that more than half of those buyers hadn’t purchased an original iPad, so Apple expanded the iPad market well beyond their loyal fan base.

Perhaps it was a sign of capitulation that very few new tablets were announced at CTIA in Orlando two weeks later.  The only notable tablet push was made by Samsung, who unveiled new 8.9” and 10.1” models of their Galaxy tab behind a “What’s your Tab life?” promotion aimed at portraying Samsung as the only OEM not taking a “one size fits all” approach to the tablet market.

Unfortunately the only WiFi Galaxy Tab that would be headed toward store shelves in the near future was the 7” model, which had been selling poorly as a 3G device requiring a two-year contract with a wireless carrier.  The 10.1” Tab wouldn’t be available until June, and no date was announced for the 8.9” Tab, which felt bulky enough to make one wonder whether there really was another tablet sweet spot between the pad sized 10.1” and the legal junior sized 7” form factors.

Other would be iPad 2 challengers have faired no better.  Motorola finally released a WiFi Xoom in late March, but it shipped with a non-functional microSD slot, no support for Flash, and only a few dozen Honeycomb optimized apps in the Android Market.  The Xoom also had a retail price $100 higher than the iPad 2. RIM delayed the release of the first PlayBook by several weeks amid rumors that they were having difficulty securing components.  When the PlayBook finally ships in late April, it will do so without integrated email and calendar apps, a surprising weakness for a tablet aimed at RIM’s rapidly eroding base of business users.

The success of the iPad 2, coupled with the stumbles of would be competitors, has caused many analysts to revisit their predictions regarding the tablet market.  Many now see Apple maintaining a dominant position in tablets for another 3-5 years, based on their early mover advantage and the billions in prepayments they have spent to lock up supplies of critical components like semiconductors and displays.

While some focus on the supply chain, others attribute Apple’s dominance to their retail outlets or their loyal fan base, though data suggests neither is a major factor as iPad 2 sold briskly through other retailers and many buyers didn’t own other Apple devices.  The supply chain and vastly superior marketing are Apple’s big advantages.  Apple announces new devices away from the din of competing announcements at industry trade shows, and they have units ready to ship to stores in short order.

The outlook for the tablet sector in 2011 is still strong.  Despite protestations from traditional PC players like Microsoft, who never delivered on promised tablets in 2010, and Dell, whose Streak was lampooned by reviewers, tablet sales overall are still increasing at the expense of laptops.  The availability of more WiFi models this summer and the inevitable discounts to move current models to make way for new ones (even the original iPad was discounted once the iPad 2 was announced) will push more tablets into the hands of users, driving demand for more tablet apps from developers.

In particular, the 7” form factor, used by both Samsung’s Galaxy Tab and RIM’s BlackBerry PlayBook, offers a real alternative to the larger format of the iPad, which can’t be carried in a pocket or purse.  Additionally RIM is planning to extend the PlayBook’s QNX operating system to support Android apps, increasing the number of apps available for that device as well as the overall market for Android apps.  HP is also planning to debut their first webOS tablet sometime this summer and there are rumors that Amazon might launch an Android tablet that would give them a chance to parlay their existing referral network into a dominant app sales channel.

Apple’s tablet rivals got off to a disappointing start in the first quarter of 2011, but Apple’s supernormal profits will continue to attract equipment makers, operating system providers, carriers, and even retailers, all looking to get their share of the public’s growing appetite for tablets.  Developers will leverage the rapidly growing power of these convenient computers to develop compelling mobile and connected apps that will further increase demand for tablets.

By the end of 2011, we expect the number of tablet users will have more than doubled and tablets will be well on their way to becoming a necessity rather than a luxury.  If you don’t have a tablet strategy, you’d better start working on one.