What Does the Galaxy Tab's Success Say about the Outlook for Android Tablets?

Very little; it says more about the popular size of the Galaxy Tab (7") than anything else. I have now used the Samsung Galaxy Tab multiple times. The device is clearly inferior to the iPad. But Samsung has sold over 2 million units, despite this inferiority and pricing that put the device about $100 above what it should cost.

New data from Strategy Analytics now asserts that Android tablets have 22% of the overall tablet market; most of this is the Galaxy Tab: 

Android devices captured 22 percent of global tablet shipments in the three months to Dec. 31, up from 2.3 percent in the preceding quarter, the Boston-based researcher said in a statement today. The iPad accounted for 75 percent of shipments in the period, down from about 95 percent, it said.

Apple’s iPad, which has sold more than 14.8 million units worldwide since its introduction in April, faces intensifying competition from Android tablets made by Samsung Electronics Co., Motorola Mobility Holdings Inc. and Acer Inc. Google gives away Android for free to boost revenue from services such as mobile advertising and expand the market for its search engine.

I've argued that the success of the Galaxy Tab is about its size and that Apple is leaving a hole for competitors in the 7" tablet category. Cupetino has criticized the 7" tablet as offering a poor user experience because of the smaller screen. But people want more portable tablets and 10" is too large to "walk around with." Data show that most iPads are used at home. 

Motorola's Xoom tablet is set to direclty take on the iPad with a 10" screen and Android 3.0 (optimized for tablets). Like Android phones, there may be technical capabilities that improve upon the iPad (more RAM, dual-cameras) but it's hard to image the holistic experience being better -- especially given how inferior the Galaxy Tab is. One concession on my part: the absence of flash on the larger screen device is more of an issue than on smartphones with their smaller form factor. 

As with Android smartphones there will be scores of Android tablets in the market by Q4 of this year. Most of them will be poor imitations of the iPad but one or two of them may be bona fide competitors. In the "nano" category the field is more wide open as I mentioned. 

Price and size will be the drivers of Android tablet success (or failure). Cheap tablets will succeed and really sophisticated competitors to the iPad may also sell well if priced well. My belief, however, is that Apple is leaving money on the table without a smaller iPad -- unless it builds a larger screen iPod Touch or iPhone. I suspect we'll see one from the company next year, especially if Android sales continue to gain strength. 

Update: the Samsung Galaxy Tab sales figures are bogus. Plus: Galaxy Tab has high returns rate.