Tablet Battle to Heat Up, Prices to Fall in 2011

Last week’s Consumer Electronics Show was indisputably dominated by tablets. Almost a year since Apple redefined portable computing with its iPad, competitors launched attempts to cut the Cupertino company’s lead. Taken together, the announcements at CES provide a much clearer picture of the likely evolution of the tablet market in 2011 and provide consumers a few tips on what to look for and when to buy.

Some of the biggest buzz at the show was for Honeycomb, version 3 of Google’s Android operating system and the first developed for tablet PCs rather than smartphones. The operating system and a tablet that will use it, Motorola’s Xoom, were unveiled at CES and are due to be launched in the next few months. (Watch related video.)

“Until now these tablets have basically been big smartphones and for the first time this spring we’ll start to see tablets like the Motorola Xoom that run on a version of Android that is really much better suited for that screen size,” said Sarah Rotmann Epps, an analyst at Forrester Research.

At least two other vendors, Toshiba and Asus, also promised Honeycomb tablets and more are on the way, strengthening Honeycomb’s position against Apple, but it won’t be the only technology to take on the market leader.

Research In Motion, which makes the popular BlackBerry smartphone, will launch PlayBook that runs on a proprietary platform and connects with the BlackBerry. Hewlett-Packard has also promised a tablet based on the WebOS platform that it purchased from Palm.

“We see this becoming a three-horse race pretty quickly,” said Rotmann Epps. “We see iPad leading, and then Motorola and then BlackBerry … duking it out for second and third place. HP, who is not showing at CES, is kind of a wildcard here.”

While CES represented the start of the tablet race, things won’t really heat up until the first iPad competitors begin hitting shelves in the next few months. Many expect Apple will have announced an update for the iPad by then.

“By the end of March we will see probably the iPad 2, as well as the Motorola tablet based on Honeycomb, the Xoom,” said Bob O’Donnell, vice president at IDC. “We will also see the release of PlayBook, so at that point in time I think it is a good time to buy.”

“Later in the year I think we’re going to see lower prices, so if you want, wait and let these guys battle it out and keep undercutting each other on price,” said O’Donnell. “By holiday 2011 they’ll be some amazingly good prices. Unfortunately it will probably be on products that are being discontinued but nevertheless they’ll be some really low prices.”

Missing from much of 2011’s tablet talk is Microsoft. The world’s biggest software maker promoted tablets in Las Vegas as far back as 2001, but moved away from the market after several years of little success. Apple’s success caught the company napping without a tablet-optimized OS.

Tablets based on Windows 7 were unveiled at CES, but they’re not expected to achieve the same level of success as some of their competitors. For that, Microsoft might have to wait until Windows 8.

At CES the company said it would port the next version of its Windows operating system to ARM chips, the processors around which many tablets are based. Its current Windows 7 doesn’t support ARM and that means Windows 7 tablets have to be based on Intel and AMD laptop chips.

“That’s a big deal however, let’s be honest, it’s probably two years away so let’s not hold off, let’s not wait for that one,” said O’Donnell. “By then the world is going to be very different.”

Martyn Williams covers Japan and general technology breaking news for The IDG News Service. Follow Martyn on Twitter at @martyn_williams. Martyn’s e-mail address is martyn_williams@idg.com