Android Tablets Have Room to Grow

May 26, 2011
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In talking with some some analyst colleagues both in the industry and financial sector, I've come across some interesting perspectives regarding Android tablets. Most of it extremely shortsighted and uninformed, yet these are credible voices with powerful opinions. My goal in this article is to add some perspective about the tablet market but also point out why Android tablets are not doomed to fail.

Tablets are a Growth Segment
Forecasting shipments of anything is not a perfect science. Nonetheless, if you tally up most of the credible forecasts we should expect somewhere between 36-50 million tablet shipments in 2011*. That represents anywhere from 150% to 220% growth over last year, and triple digit growth should continue in 2012 as well.

What everyone does agree on, however, is that tablets are a growth segment and will continue to be for some time. The bottom line is this category and class of product is not going away any time soon.

Now, what will remain to be seen is how large the overall market for tablets can become. My guess is its somewhere between the PC market at just over 400 million per year worldwide and the current mobile phone total market currently at 1.4 billion per year worldwide.

Whatever the case, we will see explosive growth for tablets and Android tablets in particular over the next five years.

There isn't a Tablet Market there is an iPad Market
This statement has been a repeated joke in conversations behind closed doors; it was certainly true last year and to a degree it will be in 2011, but it won't be true forever. The iPad is no doubt an amazing product which is set to have another amazing year. Android tablets however won't fare too badly either and, based on early estimates I've seen, will probably sell between 10-15 million devices this year.

I have a sneaking suspicion an Amazon tablet could take this number even higher and set the bar for Android tablets. Regardless, prices will come down, retail and carrier channels will spur demand, there will be a wide variety of form factor choices and, most importantly, Google will continue to make the Android experience and ecosystem better.

The open Android ecosystem will help as well especially with the open accessory kit Google has developed. Now that Google has opened the door for an accessory ecosystem as well I believe the Android device and Google services story will continue to get stronger.

Consumer choice is important in all markets but especially when a market is maturing. Within Android tablets, we will continue to see a wide variety of choices over the next few years and that will contribute to Android's tablet growth.

Nonetheless to capitalize on demand for tablets my recommendation to the hardware makers is to not try and compete with the iPad. Instead I encourage them to be creative, innovative and build experiences that showcase their company's skill sets.

Market share will be deceiving the next few years since tablets are a growth market and companies will attract new consumers not necessarily take share from others. This means success should be measured in devices shipped not necessarily market share. Needless to say, it will be exciting to watch this market mature.

* Sources for tablet forecasts: IDC, Gartner, Creative Strategies, Inc, Samsung.


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