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Flops Pile Up in the Tablet Market

Flops Pile Up in the Tablet Market

By BRIAN X. CHEN, The New York Times | Updated: 6 June 2012 14:07 IST

Highlights

The stories of tablets hitting the market and failing to sell are piling up. This week, Dell discontinued its Streak 7 tablet, after the death of the Streak 5 in August due to poor sales.

It's been a gloomy holiday season for tablet makers -- unless, that is, you are Apple, Amazon or Barnes & Noble.

The stories of tablets hitting the market and failing to sell are piling up. This week, Dell discontinued its Streak 7 tablet, after the death of the Streak 5 in August due to poor sales.

The move marks Dell's departure from the tablet market in the United States, at least for now.

A Dell representative said the device will still be available in China and elsewhere overseas.
And last week, Research in Motion said it would take a $485 million write-down related to poor sales of its BlackBerry PlayBook tablet. A financial analyst estimated that RIM had 1.4 million unsold BlackBerry tablets left in its inventory.

Then of course there is Hewlett-Packard's TouchPad tablet, which was pulled off shelves after 48 days, followed by a fire sale of the device for just $100, down from $500. The fate of the TouchPad is uncertain, awaiting a decision from H.P. on what to do with the tablet's software, WebOS.

Why is it so hard to make a successful tablet? Companies are failing for the same reasons that a string of tablet devices flopped before the iPad came to market, says Sarah

Rotman-Epps, an analyst with Forrester Research. Lack of content and capability are the key reasons.

"It's the same story as it has been from the beginning," Ms. Rotman-Epps said. "They're all trying to sell tablets as if they were PCs. Verizon marketed all these tablets with 4G and gigabytes of storage. What consumers care about is what they can do with the device."

Meanwhile, Apple made roughly 42 million of the 58 million tablets sold worldwide in 2011, according to estimates by Gartner, a market research firm.

And Amazon's new Kindle Fire, a seven-inch tablet priced at $200, is having a promising start as well. Based on shipments of the Fire from Taiwan, Forrester estimates the retailer will sell five million of them over the holiday season.

The Nook Tablet from Barnes & Noble, a $250 seven-inch tablet released two days after the Fire, has a chance to take off as well. Forrester projects that up to two million Nook Tablets will sell in the fourth quarter.

Propelling the success of the iPad is the iTunes store, which offers applications, books, games, music, movies and more. Fire customers, too, can download e-books, apps and movies from Amazon, and Nook Tablet customers can grab media from Barnes & Noble's digital store.

Amazon and Barnes & Noble's tablet numbers are not shaping up to be nearly as big as Apple's iPad sales, but all three devices can succeed on different scales, Ms. Rotman-Epps said.

She noted that the lower price tags on the Fire and Nook would appeal to customers wanting a pure media-consumption experience. Apple will continue to have the edge, especially in the world of business, as many companies are opting to purchase iPads for their ease of use and flexibility, Ms. Rotman-Epps added.

"Today iPad is still synonymous with tablets, but with the introduction of the Kindle Fire and the Nook Tablet, that's starting to change," she said.

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