This week, Digitimes' Monica Chen and Joseph Tsai reported that the iPad 2 launch expected for Q1 2011 is expected to seriously weaken other PC vendors' tablet PCs.
With consumer demand for tablet PCs still limited, they note, some analysts are suggesting that most upstream and downstream players are overly-optimistic about the tablet's potential, and predict that tablet PCs may see a sharp drop in demand as soon as Q3 2011, after a big battle in the year's second quarter.
So are tablets destined to reprise the netbook's recent meteoric rise followed by an sharply precipitous fall-off in demand? It seems likely that a degree of tablet market saturation will be reached in 2011, with an onslaught of new tablets from an array of vendors reaching the market in volume. However, the analogy with the netbook's volatile trajectory is likely to be limited.
For one thing, there is no tablet nemesis on the horizon that could knock the category for a loop the way that the iPad affected netbook sales. For another, there was no App. Store for netbooks stoking demand, and the tablet computer in the iPad era is much more of a distinctly different product category in its own right compared with the netbook, which is essentially a smaller, cheaper, lower-powered and less-capable clamshell laptop.
Consequently, the tablet should be able to consolidate and build on the foundation established by Apple with the iPad, although it's hard to imagine that the iPad's blistering pace of growth through the last nine months of 2010 can be sustained, or emulated by other vendors in what will be a much more competitive marketplace next year.
On the other hand, initial sales volume cited for what is arguably the first major iPad competitor achieving volume sales should be encouraging to other players entering the tablet market.
Samsung has announced that in its Galaxy Tabs tablet's first two weeks of release, more than 600,000 have been sold, making Samsung's prediction at the product's November 14 launch that it would sell one million Tabs plausible. For some context, Apple sold a million iPads in its first month of release, and could have moved more had sufficient production capacity been on stream.
We reported yesterday that Apple's Chinese iPad subcontractor Foxconn Electronics is ramping up production in anticipation of strong Christmas demand at a new plant in Chengdu, China with a capacity of 10,000 units per day, augmenting the production capacity of Foxconn's current main iPad plants Shenzhen. And iPad shipments in Q4 2010 are projected to surpass seven million units, which would bring total volume for 2010 to 15 million units.
Foxconn plans to bring some 50 iPad production lines on line at Chengdu with an annual maximum capacity estimated at 40 million units according to anonymous industry sources. However, whether that ambitious production figure is ever attained will depend much on how iPad 2, expected to launch before the end of Q1, 2011, is received, and how effective a run for its money Samsung, Acer, Research In Motion, and a host of other tablet contenders will be able to give Apple.