Rival Tablets Could Trim iPad Sales in European Market

Apple's iPad absolutely dominates the tablet scene in the U.S., and few analysts expect that to change anytime soon. But that may not be the case in Europe.

According to a new report from Forrester Research, Apple's rivals may fare better in Europe -- with some caveats. So says Sarah Rotman Epps, author of a Forrester report released Tuesday on the European tablet market.

"With the recent launch (and huge marketing push) of the Acer Iconia Tab and Samsung Galaxy Tab 10.1 in multiple European countries, one might think that things were looking up for Android tablets in Europe -- but that's not the case," Epps wrote in a blog post.

Small Window of Opportunity

The good news is that Europe is and will remain a huge market for tablets. Forrester predicts that EMEA (Europe, Middle East, and Africa) will account for 14.5 million, or 30 percent, of worldwide consumer tablet sales in 2011. Three times the number of Europeans who have tablets today say they are interested in buying one in the future.

Apple also has a stronghold in the United Kingdom, but beyond the shores of the U.S. ally Forrester said tablet makers could find opportunities to compete against the iPad maker. It offered some stats to help paint the picture of Apple and its tablet competition in Europe. Apple has 52 Stores in Europe, but 30 of them are in the U.K. That compares to 238 Apple stores in the U.S.

"Apple's brand and channel presence is not uniformly strong in Europe. Mac ownership, for example, is lower in every EU-7 country than it is in the U.S.," Rotman said. "But no competitor has met Apple's challenge. Despite Apple's potential vulnerability, we estimate that Apple still has 70 percent market share for tablet sell-through to consumers in Europe."

Focus on Price

She was quick to point out that sell-through is different from shipments. Forrester interviews with European retailers confirmed that non-iPad tablets are sitting in the retail channel. In other words, manufacturers are shipping more tablets than consumers are buying. As she sees it, iPad competitors' prices are too high, and no competitor has matched Apple on content or channel strategy. What does this mean?

"Low-cost tablets from ODMs like Huawei and ZTE will put downward pricing pressure on the market, but consumers need more than a lower price tag to buy. Sony, which has a strong brand and channel presence in Europe but tends to price on the high end, may have some success with its upcoming Sony S1 tablet," Rotman said. "But truly radical disruption requires (creating a new experience), as we expect Amazon to do in the U.S. Without a radical Amazon-like disruptor, Europeans are likely to buy an iPad -- or wait for something truly different to come along."

Apple's Tablet World

Michael Gartenberg, an analyst at Gartner, said competing with Apple's iPad anywhere in the world boils down to this fundamental question: Why should consumers should buy a competing tablet as opposed to an iPad, which is rapidly becoming the standard for tablets in terms of price, features and applications?

"Apple is still dominating by a very large margin," Gartenberg said. "Certainly a lot of these competitive products are great products in and of themselves in a world where Apple doesn't exist. But unfortunately for them, Apple is around."

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Analyst: iPad forcing rival tablet makers to cut back

Facing unrelenting competition from Apple's iPad, many rival tablet makers will build fewer tablets than originally planned, according to a J.P. Morgan analyst.

(Credit: Apple)

In a research note released yesterday, analyst Mark Moskowitz said that non-Apple tablet makers have gotten an early "dose of reality" by failing to produce a high-volume tablet that comes close to matching the demand for the iPad.

As a result of the "weak showing" of products such as Motorola's Xoom, Research In Motion's PlayBook, and Samsung's Galaxy Tab, many tablet makers have cut back on their plans to build tablets by around 10 percent this year.

As a result, Moskowitz estimates the number of tablets that companies collectively plan to build for the year has dropped to 73 million from the 81 million he forecast in March. Among global tablet makers, only Apple, HTC, and Lenovo have kept their build plans intact since March. Other companies, such as Acer, Dell, Motorola, RIM, Toshiba, and Samsung have cut their build plans by double digit percentages.

"We do not think the first generation of tablet offerings from the non-Apple tablet hopefuls stand to offer compelling price and feature sets to drive incremental purchasers within vendors' projections," the analyst said.

By far the leader, Apple plans to build 38 million iPads this year, followed by Acer with plans to build 8 million and Samsung expecting to build 6.5 million.

Looking at the iPad, Moskowitz doesn't believe that shipments are being limited by timing or supply chain problems. The analyst still expects Apple to ship 6.75 million iPads for the quarter ending in June. For all of 2011, Moskowitz is forecasting iPad shipments of 29.6 million, giving Apple a 62 percent share of the tablet market for the year.

Despite the anticipated downturn in manufacturing non-Apple tablets, the iPad and its rivals still stand to affect the overall PC market, believes Moskowitz.

"On a relative basis, our assumptions of total tablet shipments in 2011 amount to only 3 percent and 11 percent of total handset and smartphone units, respectively. In contrast, our tablet unit assumptions amount to 32 percent and 21 percent of desktop and notebook PC units, respectively, which we think means that tablets stand to be big enough to have positive (or negative) spillover effects on the broader tech food chain."

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RIM's new BlackBerry Playbook a worthy rival to iPad

You need three things to compete with Apple's iPad tablet computer: a gorgeous, easy-to-use device that people will love, a bustling app store and an attractive price tag.

Nobody has been able to match the iPad thus far. But the PlayBook, the first effort from BlackBerry smartphone-maker Research In Motion (RIM), has emerged as one of the strongest contenders.

On the surface, the PlayBook looks similar to other iPad competitors: Its slick touch-screen measures 7 inches diagonally, smaller than the iPad's but comparable with those of others. It has front and rear cameras for snapping photos and video conferencing and a black rubberized-plastic back and sides.

What's different is the software powering the PlayBook. Most non-iPad tablets use Google's Android software; RIM developed its own — a smart decision, yielding a device that is a pleasure to navigate and filled with cool features. Although RIM's software was built from scratch, it has hints of the BlackBerry phone's interface.

Cellular version promised

When it goes on sale Tuesday, the cheapest version will cost $499 — the same as the cheapest iPad. It comes with Wi-Fi capabilities and 16 gigabytes of memory. A model with 32 GB will cost $599, and the 64 GB version will go for $699. Sprint plans a version that works over cellular connections this summer, rivaling the ability of different iPad models to connect to the Verizon Wireless or AT&T network.

Unfortunately, the PlayBook isn't yet much of a competitor on the app front: There are just 3,000 applications currently optimized for the tablet, and during my testing it appeared unable to download App World apps available for BlackBerry smartphones.

More apps to come

By contrast, there are more than 65,000 apps available for the iPad, which can also run iPhone apps (Apple offers more than 350,000 apps total). And while it's unclear exactly how many tablet-specific apps there are for Android, Android tablets can run any of the more than 150,000 apps in the Android Market.

But the PlayBook aims to catch up, in a way: Later this year, it will be able to run Android apps, too.

In my hands, the PlayBook felt solid and easy to use. There are just a few buttons on the top for adjusting volume and playing or pausing music or videos. There's also a tiny button for turning on the device — so teeny, in fact, that I regretted trimming my nails right before testing.

Finding my way around the PlayBook was delightfully easy and fast because it has a speedy processor.

At the top of the main page sit device settings and alerts for things such as software updates. Across the bottom, you see a scroll of apps that you can swipe through or expand to fill the screen by swiping a finger upward.

In the middle of the screen are small thumbnails of your open apps; you can slide your finger left or right to sort through these and pick or dismiss them with a tap or a flick.

One cool feature: Open apps remain active even when you're looking at them from this view. So if you open the camera and later sort through your open apps, the viewfinder will still be working in the tiny thumbnail of the camera app.

Even though the PlayBook is smaller than the iPad, its screen was bright, colors looked rich and images were sharp. I felt immersed watching videos — a combination of the excellent display and simple frame surrounding.

The PlayBook supports Flash video playback — something the iPad doesn't do — and HTML5 for rich video content. Thus, you can browse the Web much as you do on a computer. There are a few annoying quirks: For example, the PlayBook took a long time when scrolling through long documents or Web pages.

In general, though, the PlayBook's screen was very touch-sensitive, and I especially liked how the PlayBook takes advantage of it. Instead of hitting the power button to wake up the device, you can make one long swipe upward with a finger.

Neat tricks

When using an application, a long upward swipe will bring you back to the main page that shows the settings and your applications. Make a hard swipe to the left or right to flip through your other open applications. Another neat trick: You can zoom in on Flash videos by spreading two fingers on the screen.

Of course, RIM is known for its focus on business users, and the PlayBook can do plenty of work, too. It includes word processing, spreadsheet and slide-show apps and can easily be attached to an HD TV through its Micro HDMI port (for presentations or, if you're like me, streaming online movies to a flat screen). Its on-screen virtual keyboard was surprisingly accurate and took very little time to get used to.

And if you have a BlackBerry phone, a nifty feature called BlackBerry Bridge links the two devices over Bluetooth. When I tested it, it wasn't fully functional. But it promises to let you easily do things on the tablet such as using the BlackBerry Messenger app on your phone and accessing BlackBerry emails and calendar. For a business user who feels constrained by the BlackBerry's small screen, this could be a nice complement.

Battery life

RIM expects the PlayBook to get eight to 10 hours of battery life while multi-tasking. I got about six hours while surfing the Web, streaming Internet radio, checking emails and streaming videos. Maybe this was actually a hint that I should limit my music video habit.

The PlayBook is an impressive tablet — it has to be, considering the iPad's head start. And if RIM can ramp up its app offerings, it will be an even heartier contender.

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