Apple Owns Global Tablet Market As Galaxy Tab Arrives

The Samsung Galaxy Tab goes on sale in a couple of weeks in the US. Will it sizzle or will it fizzle? My guess is something in between.

Here's what Steve Jobs had to say about the forthcoming bunch of tablets, led by the Galaxy Tab:

First, it appears to be just a handful of credible entrants, not exactly an avalanche. Second, almost all of them use seven-inch screens as compared to iPad's near 10-inch screen . . . [The] screens on the seven-inch tablets are a bit smaller than the bottom half of the iPad display.

[E]very tablet user is also a smartphone user. No tablet can compete with the mobility of a smartphone, its ease of fitting into your pocket or purse, its unobtrusiveness when used in a crowd. Given that all tablet users will already have a smartphone in their pockets, giving up precious display area to fit a tablet in our pockets is clearly the wrong trade off. The seven-inch tablets are tweeners, too big to compete with a smartphone and too small to compete with an iPad.

[The] iPad now has over 35,000 apps on the App Store. This new crop of tablets will have near zero . . . and [ ] our potential competitors are having a tough time coming close to iPad's pricing, even with their far smaller, far less expensive screens.

Endgadget is out with its Galaxy Tab review. The gadget blog generally likes the hardware but says the device lacks app support. I haven't used one so I can't comment; however I think the pricing is wrong. It ranges from $399 for the two-year contract subsided version (Sprint, T-mobile) to $599 or $699 for the "unlocked" version of the device. 

Here's the problem. The contract version is $100 too expensive and can't (apparently) be used as phone, other than with VoIP providers. The unlocked versions are too expensive when compared with the larger-screen iPad. The right way to do this would have been to enable the device to be used as a smartphone substitute. Then the $399 price is more palatable.

But as Jobs suggested most Tab buyers will have a smartphone already. So they're not going to want to buy yet another carrier contract. They're likely to wait for the WiFi version and buy it unlocked. But then it's too expensive for a device that in most respects is inferior to Apple's tablet. 

My prediction is that when it becomes available in a couple of weeks there will be decent but not great sales for the Samsung device. If it had been priced more aggressively it might have flown off the shelves. Apparently the Galaxy Tab cost $200 to manufacture so a $300 price point cuts deeply into margins. But the right price for the (subsidized) Galaxy Tab would have been $299. 

By this time next year we should have several Android tablets in market, together with an HP WebOS tablet and a few windows-based tablets. RIM's Playbook will also be out. The market will be a great deal more interesting and potentially confusing as consumers try and navigate all the device choices and how to connect them all to the Internet in the most economical way.  (This is a huge issue: consumers want the best devices and unlimited connectivity at the cheapest prices; carriers want to thwart that objective.)

For the time being Apple owns 95% of the global tablet market according to Strategy Analytics:

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