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Tablet Wars: 3 Reasons Why iPad Will Prevail

By Tom Kaneshige, CIO
October 04, 2010 05:31 PM ET

CIO - Seriously, who bets against Apple in the tablet race? Maybe mobile tech giants such as RIM, Samsung and Dell, will, given that they're readying Blackberry and Android tablets to compete with the iPad, but not many others.

When the super-hyped iPad arrived in Apple stores in April, Apple racked up three million sales in the first 80 days. Within a few weeks the iPad captured 16 percent of the e-reader market to take second place behind the established Amazon Kindle with 62 percent, according to ChangeWave Research. The iPad posted sales of $2 billion in its first quarter and is on pace to have 84 percent of the market this year, according to ISuppli.

[ Got an iPhone, Android or BlackBerry? Find out what they say about you, reports ]

There's speculation that the smash-hit iPad played a big role in slowing notebook and netbook sales. The iPad starts at $500, which is the netbook price sweet spot. Morgan Stanley reports that retail notebook growth in the United States fell 4 percent in August compared to the year prior."We expect tablets to continue to pressure PCs as more vendors launch products and Apple expands its iPad distribution," wrote analyst Katy Huberty, in a recent research note.

The iPad has thrown the proverbial monkey wrench in some tablet makers' plans. Unable to compete with the iPad's price, Plastic Logic recently halted plans to release its new product. Foxit Software also pulled the plug. Rumors of a Microsoft tablet petered out, and Hewlett-Packard's Slate is a no-show so far.

But BlackBerry Playbook and Android tablets bring a higher level of competition, even more so than the Kindle. BlackBerries rule the mobile smartphone enterprise space, with iPhones carving out only a tiny piece so far. Sales of Android smartphones outsold iPhones for the first time last quarter, according to a Nielsen study.

Samsung, Toshiba, ViewSonic and Archos recently announced tablets running Android 2.2 OS that will support Flash. BlackBerry-maker RIM just unveiled its mobile tablet, the BlackBerry PlayBook, last week. "The BlackBerry PlayBook, like BlackBerry smartphones, will become the enterprise standard," said co-CEO Mike Lazaridis.

Can BlackBerry and Android bring their mobile success to tablets? Many industry analysts think the iPad will prevail for a number of reasons. Here are three of them:

1. First Mover: A Bunch of Advantages

Apple's ability to deliver great products is unparalleled in consumer tech. With a giant market lead, Apple might be uncatchable. As we already know, Apple reinvented the tablet market--that is, the iPad is much more than an e-reader that competes with Kindle--and brought touch technology to mobile devices.

First mover advantage is more than just consumer mindset and market share; there's a supply chain advantage, too. Apple buys a ton of Flash and touch technology on a scale that will make it hard for tablet makers to compete with the iPad on price.

"We believe Apple's lead in the tablet market will prove difficult to close by the onslaught of competing products coming over the next several quarters," Deutsche Bank analyst Chris Whitmore wrote in a research note. "Ultimately, we expect the slew of upcoming competition to fall flat from a user experience standpoint while struggling to materially undercut the iPad on price."

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