Is the Galaxy Tab a Small iPad or a Bigger Smartphone?

It appears now, definitively, that the iPad is cannibalizing PC notebook and netbook sales. This has been speculated for some time but new comments and figures appear to confirm it. The chart below was taken from a Morgan Stanely report (via Fortune). In addition, the Wall Street Journal reported that Best Buy CEO Brian Dunn said "internal estimates showed that the iPad had cannibalized sales from laptop PCs by as much as 50%." 

The iPad has sold, according to estimates, as many as 4 million to date. It's a massive hit. And there are many aggressive sales estimates out for 2011. One UBS analyst forecast that the iPad would sell 28 million units globally next year. 

Those sales projections will depend on the economy but also how viable the iPad's competition is. That brings me to the Samsung Galaxy Tab, which will apparently be offered by all four major wireless carriers in the US and will cost between $200 and $300 depending on the carrier. 

See the video demo below, but the Galaxy Tab appears to be the first legitimate Android-based iPad challenger. Or is it an iPad challenger?

Some people will probably be motivated by the lower price and smaller form factor (7") to buy the Galaxy Tab as an alterative to the iPad. But it might also eat into smartphone sales. It will be usable as a phone via the carrier relationships -- making it a much (capital M) better mobile Internet device than a true smartphone.

Screen shot 2010-09-17 at 8.43.52 AM

The iPad made the world safe for the Galaxy Tab, which wouldn't exist but for the iPad. The Galaxy Tab, which will probably be a hit, will make the world safe for other small tablets. And the line between phones and tablets will blur accordingly. 

I have been talking about it for four years, but we're now firmly in the era of the "two device scenario," in which people use “Device A” (e.g., tablet) for browsing the (mobile) Internet and a phone for conventional voice communication. 

The cost of devices and data plans are gating factors to this world of separate devices for voice and data. In addition many people only want to carry one device. With its larger screen, phone capability and smartphone-like pricing the Galaxy Tab could prove to be that all-in-one device for many people. 

Regardless the proliferation of these tablet devices will further eat into netbook and potentially notebook sales even further. We're now truly in a world of mobile computing, where the PC and even the laptop are quickly going to become "secondary" devices.