High tech consumers and investors alike here in Syracuse have been excited about the new tablet market. In particular the iPad from Apple has been hot in the Syracuse market. Competitive tablets from other firms have also attracted interest here. Now, however, questions about the future of the tablet market have arisen in Syracuse after a report by the Wall Street Journal MarketWatch that the future market for tablets is uncertain. Dan Gallagher has reported for MarketWatch “Tablet market faces ‘bubble’ risk, broker warns”, http://bit.ly/fvYIaM.
J.P. Morgan has released a report which raises the prospect of a “bubble” risk for the tablet market this year. Many companies have been rushing into the sector with hopes of competing with the iPad, which sold nearly 15 million units last year and is expected to grow exponentially this year, especially after the new iPad 2 goes on sale on Friday. However, analyst Mark Moskowitz has warned that many of those competing products may be overestimating their chances for success against the Apple. Moskowitz has written “In our view, the technical and form-factor improvements of the iPad 2 stand to make it tougher for the first generation of competitive offerings to play catch-up, meaning actual shipments could fall well short of plan.”
Although tablets may be a hot market this year, companies hoping to compete with the popular iPad from Apple Inc. may be overestimating their prospects, which may lead to a potential glut of inventory. The Xoom from Motorola Mobility Holdings Inc, the BlackBerry Playbook from Research In Motion Ltd, and the TouchPad from Hewlett-Packard Co. will be flooding the market with their versions of the tablet. Toshiba, LG and Acer are also developing tablets to be launched later this year.
J.P. Morgan has estimated Apple and other manufacturers plan to build about 81 million tablet devices in 2011. This is approximately 40% above the 47.9 million units the broker expects to ship to retailers for the year. Even with a discount of the build projections by 20% this leaves an oversupply of nearly 36%. Moskowitz feels the primary risk from a “tablet bubble” will likely be borne by component suppliers, particularly those who supply LCD screens, memory and processors. The anticipated flooding of the market with tablets is anticipated to have profound effects on the ability of the tablet market to generate sustainable profits here in Syracuse and across the USA.
Mandel News Service: www.mandelnews.com