Thursday, April 21, 2011

Tablets: Post PC Computing? Is iPad Growth Too Fast?

Given how fast the iPad 2 is selling compared to the original iPad a year ago and the growth of the whole ecosystem that supports it, I wonder if the tablet market, specially one that is dominated by one player, is growth too fast.  And why is it growth so fast?   

This year, it's been estimated that Apple will sell about 30 million iPads, quite possibly 45 million with a few really high-end predictions putting it at 60 million.  Let's just take the 60 million iPads for 2011 and say Apple manages to sell 60 million by 2013.  Sit back and take a look at those numbers.  That's a big big jump from 2010 to 2011, about 2x.  Then from 2011 to 2013, another 2x.  

By 2013, the tablet market as a whole may reach 100 million tablets.  Then where would it go from there?  200 million in another 24 months?  Here's where post-PC comes into play.  Something has to give.  That means laptop sales, with the netbook segment of the market having already collapsed, could suffer a cripple blow that it might not recover from.  Laptops, and some desktops, will still continue to have a place in society, in business for sure.  However, PC in homes will likely diminish greatly.  

In the early 2000s, Microsoft pushed the Windows Media Center, basically a customized Windows with added media software, as the center of a home entertainment system.  Obviously, even Microsoft's dominance in the PC operating system has not helped its push into the living room.  Instead, it has found greater success selling the Xbox. Now, Google is trying it hand with Google TV, so far, met with muted reception at best.  Even, Apple has largely failed to light things up with Apple TV.

And this is also one market that the iPad could potentially find success.  With the introduction of Airplay, the user can stream video and music wirelessly to accessories like stereo systems and HDTVs.  Yes, HDTV becomes just another accessory in the home.  Of course, to stream to the television today, you still need the Apple TV.  This is why there's rumblings that Apple may be looking to license Airplay to manufacturers.  (One factor that hardware makers do not have control over is the content.  Apple, Samsung, Sony, and Microsoft might be able to provide the architecture but without the content, it would be useless.  This is why an ecosystem like iTunes and what Microsoft and Sony has built out on the consoles will be very critical to their continued successes.)

And we come back to growth.  How much more growth can the tablet market, with Apple retaining a large piece of the pie, sustain?  If the tablet can take the place of game consoles and media centers, I would say it can continue to grow at its current pace for at least another decade.  

It also depends the evolution of apps and the nature of productivity on the tablets.  It is possible in ten years, a majority of mobile warriors from the corporate work carry around tablets instead of laptops.  

And to continue growing, tablets will need to a lot of help in the education market.  Yesterday, Tim Cook, Apple's COO, said iPad adoption in the education market has already reach a 1 to 1 parity with Macs. That is quite an impressive feat for a device that did not exist 13 months ago.  The iPad was just built for the k-12 market.  We'll see an explosion of iPads in schools in 2011-12 owing largely to the ease of use and plethora of educational apps.  The only folks who will be hurt by this are laptop makers and printers that print textbooks.  Maybe the early go getters in the backpack market can benefit from this shift in mobile computing in schools.

Still, a lot of moving pieces have to go the tablet's way for it to continue growing at the pace its at now.  Continued innovation followed by revolutionary thinkings about traditional computing and content distribution.  Amazon has gotten into the music locker business without the blessing of the studios and looks like HP might try to do the same.  We'll see how all this play out this summer.  If the stars align just right, perhaps we just might see 60 million iPads sold through 2011 instead of "just" 30 million.

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