With a widely anticipated iPad refresh on the horizon the dynamics in the rapidly evolving mobility segment where the line between tablets and notebooks continues to blur is visited by a report recently released by an investment bank we’ve followed for some time. (See, also: Apple iPad vs. netbooks, notebooks, smartphones)
This blurring of the line between notebooks and tablets is particularly true, Deutsche Bank believes as use cases for iPad increasingly expand (e.g., text books, medical diagnostic tool, pilot flight logs…) with improving computing power and increasingly sophisticated apps. The bank states it views tablets as multi-function devices and considers e-readers (Kindle, Nook…) to be in a different category. (Read an earlier interview with MIT’s John Maeda, design guru, some reasons behind Apple’s design success)
In the report, it is states the iPad has allowed Apple to command the lion’s share of the market with approximately a 25% unit share in 4Q11 vs. sub 5% share prior to the iPad introduction. (See chart bottom of article)
Looking forward, the report states Apple is expected to introduce the iPad 3 in March with significantly enhanced specs including: high resolution display, quad core CPU, 4x to 5x higher graphics performance and Siri.
And, as a result of significantly improved performance characteristics, the report states the iPad 3 will allow Apple to expand further into more graphics and processing-rich use cases (which will likely lead to improving user experiences, gaming…).
The report states that with other tablet vendors in disarray (shifting from Android to Windows 8), Deutsche Bank anticipates the introduction of the iPad 3 could drive additional share gains in the mobile computer market.
This is partially based on Windows 8 tablets not being expected until late 2012, and most apps will require rewriting for Windows 8 ARM tablet hardware and building a developer ecosystem takes time.
As a result, the report states the bank believes Apple’s opportunity window is wide open for a strong iPad 3 product cycle.
Beyond iPad, Apple is believed to have phenomenal product momentum (iPhone 4S, iOS 5), expanding distribution (carriers / international ramp) and a solid product pipeline (Apple TV, iPad 3, iPhone 5) which could drive healthy growth into 2013, states the bank.
No iPad-killer
In the past 12 months, the tablet market has been flooded with a slew of Android-based devices; none of which have matched the success of the iPad from the bank’s perspective.
From a hardware perspective, it is clear most offerings are “me-too” with little to no differentiation, writes Deutsche Bank in its report.
Most devices sport a 9-inch-plus touch screen, dual-core processor and rear-, front-facing cameras.
Despite being outfitted with similar hardware specs to the iPad 2, none of these tablets, the bank states, have gained meaningful traction with consumers since pricing has been similar (or higher) than iPad in many cases. (See, also: Fault lines in iPad teardown cost analysis)
Further, application ecosystems have not matured and the user interfaces have been inferior. Of noteworthy mentioned, while the bank comps e-readers in the table below, it does not view them in the tablet category because they are not multi-functional devices.
The Kindle Fire has had some degree of success because it is relatively inexpensive and is a good e-reader but lacks a high quality, multi-functional capacity, as stated in the report.
Of the remaining devices available in the market, Deutsche Bank views the Samsung Galaxy Tab 10.1 and ASUSTeK’s recently introduced quad-core processor powered Transformer Prime as more relevant. But, the bank believes these Android-based “iPad-killers” will fall short.
The report states many OEMs seem to agree and are shifting their efforts on Windows 8-based tablets, which should ship in the second-half of 2012.
The bank continues in its report, that, at this point in time, the iOS platform has established such an enormous lead with approximately 170,000 iPad-specific apps and a three-year head start.
Meanwhile, Windows 8 based hardware is unlikely to ramp in earnest until 2013.
This leaves the window wide open for Apple to extend its lead in the market.
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