Will tablets cannibalize mini note books?

STAMFORD, USA: Driven by sales of the iPad, worldwide media tablet sales to end users are forecast to reach 19.5 million units in 2010, according to Gartner, Inc. Media tablets are poised for a strong growth with worldwide end user sales projected to total 54.8 million units in 2011, up 181 percent from 2010, and surpass 208 million units in 2014, it said.

Gartner analysts said the impact of media tablets on other devices will vary among segments.

“The all-in-one nature of media tablets will result in the cannibalization of other consumer electronics devices such as e-readers, gaming devices and media players,” said Carolina Milanesi, research vice president at Gartner. “Mini notebooks will suffer from the strongest cannibalization threat as media tablet average selling prices (ASPs) drop below $300 over the next 2 years.”

However, Gartner said low-end consumer notebooks will only marginally suffer from cannibalization. Gartner analysts expect very limited cannibalization on communication devices based on open OS (smartphones). The majority of the impact will be from 7-inch media tablets on high-end smartphones as it will be hard for a user to justify owning both when the differentiation in usage model is very limited.

At the same time, users buying a 7-inch tablet might opt for a lower-priced smartphone with a smaller form factor, it added.

Media tablets are slate devices that support touch and run a lightweight OS such as iOS, Android, WebOS or Meego. Examples of media tablets are the Apple iPad, Samsung Galaxy Tab and the Cisco Cius.

According to Gartner, North America will account for 61 per cent of media tablet sales in 2010. As these devices become available in more markets, North America’s share of media tablet sales will drop to 43 per cent in 2014. In 2010, celluar/Wi-Fi media tablets will account for 55 per cent of sales, and by 2014, celluar/Wi-Fi media tablets will account for 80 per cent of sales. It also said 10-inch media tablets to play a role as companion devices in the enterprise market.

“Communication service providers (CSPs) who have so far subsidized mini-notebooks to drive mobile broadband uptake will shift their marketing spend to media tablets. Such subsidies will help drive adoption among those consumers who see the initial hardware cost as a hurdle,” Milanesi said. “For the rest, the freedom of paying for cellular only if and when needed, and not having to add another contract to the one a user might already have on his or her phone, is a great advantage and has so far proved successful for Apple,” Milanesi added.