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How emerging tablet market will affect tech, telecom

Krista Napier, a senior analyst for emerging Canadian technology and digital media at the research and consulting firm IDC, recently completed a report on the tablet market. I took the opportunity to ask her a few questions about the iPad, its coming competitors and what the emerging tablet market means for companies in the tech and telecom world.

Why or how has Apple succeeded with the iPad?

With the iPad, Apple is expanding their product portfolio in an area the company is very familiar with - multimedia, consumer, and experiential devices. It's similar in that sense to other products they produce, where they deliver simple and easy to use yet exceptional experiences on sleek products, with eye-catching marketing. Basically, Apple is good at designing ground-breaking products, and that's exactly what they have done here. Tablets in their PC form have been around for a while but never really took off. They were aimed at business users, were relatively expensive and ran full operating systems. The iPad actually represents a new category of (information technology) products - media tablets. These devices are smaller and less powerful than a full tablet PC, yet they serve different purposes, are more affordable, accessible and "cool" to the average user than tablet PCs.

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You say tablets don't have to be an "iPad killer" to be successful. Can you elaborate on that?

Apple has so far been very successful with the iPad and by the end of 2010 will own the majority share of the Canadian market for media tablets. Still, there is a lot of room for competitors. That's because this is a nascent market. By the end of 2010, there will be over 500,000 media tablets shipped in Canada, and that number is expected to grow in the triple digits over 2011. With this growth comes opportunity to specialize and address the needs of key user groups, both business users and consumers. Competing vendors will have to clearly position themselves in the minds of customers, especially when you consider the number of devices we can expect to see in the market over the next 6 - 12 months. We are tracking 17 products that have already been announced, and those are just some of the key ones. The overwhelming selection coupled with the fact that many customers are still unsure as to why they would need or want one of these devices in the first place, will demand education, clear marketing and positioning on the part of vendors to be successful.

The same term is often used to talk about smart phone rivals to the iPhone - that if a new handset wasn't an iPhone-killer, than it was doomed. What lessons can we bring to tablets from the ongoing smart phone wars?

We know from the smart phone market that there is room for competition. We also know that the ecosystem surrounding these products is more important than the hardware itself in the long run. The hardware becomes a requirement just to play in the game. The online store fronts or marketplaces and content that supports a connected device like a smart phone, and now media tablets, is the real key. The apps, the music, the movies - a lot of that is accessed through the local marketplace (Android Marketplace, Apple's App Store, BlackBerry App World). If a vendor doesn't have good content to attract customers, they risk having them choose another brand. That's why it's so key to have the right partners and developers on board that are creating valuable and meaningful content.

It's a nascent market, with Apple being an early mover. What do we know about the tablet market so far - who are using the devices, what they are using them for?

We know that consumers will primarily adopt these devices, but that gap will start to close a bit as we see an increasing number of businesses reaping the benefits of these tools. We know that executives are the second most common users of these devices right now in Canadian organizations, second only to IT staff. That's not surprising either - C-level execs are a great fit for media tablets. Devices like the iPad are not always great for document creation, but they are great for reviewing, displaying, and approving content and information, which is exactly what a C-level executive tends to do most of the day.

For example, SAP has rolled them out with their North American management team, including at the Canadian office, to gain access to real time business data while in presentations or meetings, to quickly access work e-mail and documents, to review sales info and trends, and to provide more engaging and visual demonstrations with clients.

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We also know that the iPad has been a hit in hospitals. Ottawa hospital is using the iPad today to put medical records at physicians' fingertips. By the end of the year, 1,000 or more iPads are expected to be in use by doctors and nurses at the hospital for mobile access to health records. The draw for them is the portability (versus a laptop or netbook), and larger screen size (versus a mobile phone), making it more suitable for viewing medical images such as x-rays and MRI scans within the hospital, and makes it easier to discuss information with patients at bedside.

Others, such as Research In Motion and Samsung, have announced their own media tablets. What do you make of these competing products and how do they differ from Apple's?

Samsung is clearly targeting the consumer space. They have a large installed base of mobile phone users (the largest for any original equipment manufacturer in Canada) and is a leading manufacturer in the consumer electronics market, giving it a favourable head start in consumer brand awareness. With an Android-based operating system, Samsung will be in a favourable position as well to price its device lower than the iPad to achieve a competitive advantage in the market with more mainstream consumers that are not willing to pay premium prices.

RIM's key strength is its huge existing customer base and penetration of the smart phone market, particularly with business users. Positioning itself to target these business users would be a good approach for them, and help differentiate them from the other more consumer based products. Their tablet also differs by complementing its existing BlackBerry smart phone line of products, allowing the two devices to pair up so that users can leverage 3G wireless networks from their existing BlackBerry smart phone plans.

What sort of impact do you expect media tablets to have on software vendors?

I think an increasing number of software vendors will realize how important it is to be on these devices so they are front and centre with their customers. IBM, for example, is expecting some of its more than 145 million Lotus Notes users will buy iPads and will want to access their work email, calendar, and contracts through these comfortable devices from hotel couches while on the road. So they are optimizing Lotus Notes for these devices.

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Similarly, software-maker SAP has optimized its solutions for use on an iPad and will do so for other media tablets as they become available. These and other large software companies realize how important it is to be present on these devices, and are making a point of doing so early.

What sort of impact do you expect media tablets to have on other device categories?

One impact I think we will see is media tablets turning laptops into "desk-tops". Put another way, you're less likely to take your laptop around with you to a meeting or onto a plane if you can bring a more portable and convenient media tablet with you. The laptop becomes the device you come back to - like a desktop - afterwards to create a document or for more powerful computing tasks.

I don't believe, however, that the media tablet will replace a laptop or desktop computer. Based on how they are defined, media tablets (that run "lightweight" operating systems) simply cannot offer the computing power of a full operating system. And that's OK - it just means that for the most part we won't see substitution happening here, unless you're someone who does not need all that computing power. For example, my mom uses her desktop for e-mail, surfing the web, and looking at or sending pictures. For her, a media tablet could actually meet all her needs and replace her desktop.

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