The tablet-computing revolution is about to go into hyperdrive.
With Apple's (AAPL) expected unveiling Wednesday of its third-generation iPad just 25 months after making "tablet" a household word, the Cupertino-based bigfoot in handheld computing could well hasten the demise of desktop and laptop PCs and transform our digital lives.
Analysts say a new and improved iPad 3 -- which is expected to have a clearer screen and faster processor -- would further fuel Apple's commanding lead in the burgeoning tablet market as Microsoft and makers of Android-based devices, including Amazon's Kindle Fire, push their own offerings out the door in the coming year. As the competition heats up and brings consumers more choices, tablet sales could easily erode the dominance of the PCs many adults cut their tech teeth on.
"You look at the adoption curve of the iPad versus the iPhone and it's vertical for the iPad," said analyst Gene Munster with Piper Jaffray. "And the reason is that something bigger is going on here: Essentially anything we once thought of as pen-and-paper activities can now be supplemented by a tablet."
The numbers are impressive. Apple, which has 73 percent of the tablet market, says it sold 15 million iPads in the last quarter of 2011 alone, more than double what it sold
the same quarter the year before, bringing in $9.15 billion in revenue over the holiday season. That's about 20 percent of Apple's total revenue, a far fatter pay-off than most observers expected when the first iPad was introduced by then-CEO Steve Jobs in 2010.
And even though Forrester Research reported this week that the iPad doesn't have an Android-based competitor with more than five percent of the market, experts expect
the increasingly crowded field will drive overall tablet sales, especially as manufacturers offer products with different screen sizes to suit individual tastes.
"There are more Android tablets selling, yet the lion's share of profit is still going to Apple," says news industry analyst Ken Doctor. "Apple controls the premier marketplace. And while its overall share could decline, I expect Apple will hold on to the premium and more profitable end of the market for a very long time."
Wednesday's event is significant because the iPad has become the poster child for the expanding tablet market, which has put the devices into the hands of everyone from fourth-graders collaborating on Algebra lessons to pilots going over flight plans to diners perusing the wine list at high-end bistros.
Adding more drama to the landscape, a growing chorus of analysts are predicting that one day soon tablet sales will outsell the traditional personal computers.
"I'd call the iPad the next PC," said analyst Avi Greengart, Research Director for Consumer Devices at Current Analysis. "While the iPad is certainly a simplified computing experience, there are all these things -- accessing media, Web-browsing, and e-mail -- that we used to do on PCs and can now do on the iPad."
The late Steve Jobs saw it coming. In 2010, the Apple co-founder brazenly declared a new era of computing -- or the "post-PC" period -- with the arrival of the iPad.
"From the first day it shipped, we thought that the tablet market would become larger than the PC market and it was just a matter of the time that it took for that to occur," Apple CEO Tim Cook said at a recent Goldman Sachs technology conference. "I feel that stronger today than I did then."
Global sales of tablets soared from 17 million in 2010, the year the iPad arrived, to a projected 118 million this year, according to Gartner. Worldwide sales of traditional computers last year totalled 352.8 million.
Indeed, no one is declaring the PC is dead. While tablets have, in some ways, upended the computer industry, many experts believe that consumers will want to own multiple devices for different purposes.
"To say the PC is dead is ridiculous," said Creative Strategies analyst Ben Bajarin. "The tablet is just a different form of a PC."
The iPad, with an ecosystem of apps that turn the tablet into a gaming device, book reader and portable video conference tool, has changed forever how people experience a computer.
When the iPad first came out, said IDC analyst Bob O'Donnell, "there were a lot of people who said, 'Why would I use this?' But it's changed the PC market in a lot of ways by resetting expectations" of what a computing device can do.
As we enter what O'Donnell calls the "PC-plus" era, the challenge is to create cloud-based services for consumers that allow them to use any device they own to access content stored on large servers instead of on personal hard drives. "Yes, tablets are having a major impact," O'Donnell said. "But long-term, they start to meld into this role as an additional, complementary device."
Despite Microsoft's plan to use its new Windows 8 operating system to blend touch-screen tablets with traditional laptops, O'Donnell said Apple has no intention of merging its MacBook laptops with the iPad.
"People working on these devices are assuming people only want one device," he said of the Windows 8 tablet computers. "Guess what: Some people like having multiple devices."
Contact Patrick May at 408-920-5689 or follow him at Twitter.com/patmaymerc
Tablets cut into pc sales
Global sales of tablets in 2010: 17 million Global sales of tablets projected for this year: 118 million Worldwide sales of traditional computers in 2010: 352.8 million Apple's share of the tablet market: 73 percent iPads sold in the last quarter of 2011: 15 million PCs outsold tablets in 2010: 20 to one PCs outsold tablets in 2011: six to one
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