JP Morgan Analyst Predicts Bubble Burst For Apple iPad 2 Rivals

Mar 9, 2011
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Earlier in the week we talked about a report that concluded only 0.3% of the Earth's population actually owned a tablet device according to data collected from late 2010. You would think that such a nascent market holds endless possibilities for all the tablet makers jumping in to compete with the Apple iPad, which has so far dominated the landscape with the first-one-there advantage. But the future, or at least the latter half of 2011, doesn't bode so well for iPad 2 rivals according to JP Morgan analyst Mark Moskowitz.

"In our view, the technical and form factor improvements of the iPad 2 stand to make it tougher for the first generation of competitive offerings to play catch-up, meaning actual shipments could fall well short of plan," Moskowitz wrote.

Moskowitz believes that Apple iPad 2 rivals may face a bubble burst by the second half of this year, claiming that tablet makers will build approximately 65.1 million tablets in 2011. Considering that 47.9 million tablets were sold last year, he believes that companies may find themselves with as much as 51% oversupply.

He believes that Apple will continue to dominate the market and estimates 29 million iPads to be sold worldwide in 2011. The companies that may be most affected by a bubble burst are those in the supply chain. "Based on our research inputs, tablet makers eager to emulate Apple’s meteoric start are trying to secure components with inflated build plans," Moskowitz noted. "Of note, glass displays, processors, and, to a lesser extent, NAND Flash are the components that could be most at risk."

"Aside from Motorola’s Xoom and HP’s TouchPad (which does not have a price tag yet), the competitive offerings appear to be light on attraction, in our view," said Moskowitz.

[via Apple Insider]


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