1/11/2010
By Carlos Guillen, Semiconductor Analyst

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Now that the Consumer Electronics Show (CES) has come to an end, it is fair to say that, while there were many products that impressed the crowds, none were more attention grabbing with a "Wow" factor than the so called "Tablets." And no, these are not Moses' Tablets with the Ten Commandments, these are Tablet PCs.

In listening to corporate managers speak at CES in Las Vegas, the impression everyone got was that these tablet devises will be the next big seller, just as smart phones have been. There is a lot of hype being built up around these new gadgets, and a number of manufactures have come out with their versions of these Tablets. Some of these manufactures include Hewlett Packard, Lenovo, and Dell; of course, Apple has still not released its version of what many are already calling the iSlate. The rumor is that Apple will unveil their iSlate by the end of January.

While these new devices are generating a lot of attention, one question remains, will there be a market for these gadgets and, if there is, how large will it be. The smart phones certainly found a market, one between a standard cell phone and a PC, but where will Tablets fit in? Will they fit in between readers (such as Amazon's Kindles and Barnes and Noble's Nooks) and net-books? Perhaps, but the price range seems too high, ranging from $600 to $1000.

It is worth mentioning that the Tablet concept is not a new one at all. In fact, this form factor has been around for quite some time. The term Tablet PC was made popular in a product announced in 2001 by Microsoft, and defined by Microsoft to be a pen-enabled computer conforming to hardware specifications devised by Microsoft and running a licensed copy of the "Windows XP Tablet PC Edition" operating system or a derivative thereof. The device, however, failed to take off as the hardware was clunky, it needed pen/stylus input, and the battery life was short. At that time, Microsoft predicted the tablet would become the most popular form of PC within five years. However, tablet PCs, launched in 2002, accounted for just 2 percent of global PC sales by 2004 and remained, at best, a niche market even as net-books and non-Windows based smart devices such as smart phones from Apple proved to be wildly popular.

At the moment, it appears that CEOs and the media have once again predicted the success of these devices, but people have not even had a chance to play with these new Tablets yet. From a personal stand point, while these devices do look very attractive, the price may prevent many from dumping their net-books or kindles. Power may also become an issue. Unlike net-books, these tablets will very likely use much more potent processors, which will require more juice, requiring more frequent charging. It is rumored that Apple's iSlate will boast an Intel 2.26GHz Core 2 Duo processor. Processors on net-books, mostly Atoms, use very little power, and Kindles last quite a long time since their black and white screens consume little energy. So far Tablets appear more like laptops with a different form factor, basically with no key board and with touch screens. We believe Tablet sales will take some time to develop, as consumer get used to the new form factor and are able to justify the high price.

Carlos Guillen
Wall Street Strategies