Is the tablet market over-saturated?

What are we to think about the new tablet market now that we have the impending release of the Microsoft Surface as well as the anticipated release of the iPad Mini? The Surface is being released as the new and upcoming big competition for the iPad and at the same time the iPad mini is being released as competition for the smaller 7 inch tablets.
The question becomes whether or not the market has become over-saturated with this new product type? I don’t believe so. There are countless options of all shapes and sizes in the laptop and new ultrabook market. Why would the tablet market be any different? They are moving from being a consumer’s luxury want into a necessity. I believe that in the electronics market and computers in-particular necessitates many options. We will have the Surface that looks to be as close to a laptop as you can get and still be in the tablet category all the way down to the simplest of e-readers. The price point will range anywhere from $69 to nearly $900. That is something for everyone. The consumers are so diverse that the category must match in its product diversity and price. 


Tyler said...

Currently, for large electronics manufacturers, there are very few barriers to entry in the tablet market. This has led to just about every major manufacturer competing in this emerging market. This is a textbook example of the free market system at work. In the event that the market becomes over-saturated, the manufacturers who fail to capture market share will leave the market, and many have. Having such a diverse field to choose from has accelerated the innovations in this market, which is great for the consumer.

Where the Surface will face an uphill battle is in the app space. Because the Surface is based around an ARM processor, most Windows 7 compatible software will not run on it. It is arriving late to a party where its strongest competitors, iOS and Android, already have over 100,000 apps available on each platform. Due to the processor, the Surface runs Windows RT and not Windows 8. Microsoft is also slated to release a tablet based on an Intel chip-set that will run Windows 8. This is the market that Microsoft should be competing in. Their strategy is to eventually merge the phone, tablet, and PC experience, which is why they are competing in the lower-price tablet market. It appears as though everyone wants to make their mark in this revolutionary market.

Da Boy said...

I agree with Tyler that the free market has and will weed out those who cannot compete in this industry. The demand for this market is quite obviously a strong one, and with new apps being released every day, and more and more companies incorporating tablets into their business models, the demand appears to be nearly infinite. Where Apple has the advantage is they were the innovator in the tablet industry, thus giving them a head start on production costs, debugging, creating new apps, etc... Moving forward, it will be interesting to see if the innovator can stay on top or if by sheer will and perseverance they can be dethroned in the race for market share.

Dave Tufte said...

Aiden: 100/100
Tyler: 50/50
Da Boy: 50/50

I think Aiden is right. What we are seeing is broadening of the market by niche filling.

Having said that, I think what we should wonder is why this market is being "commoditized" while the smartphone market is not. I think what's confusing is that we have smartphones that clearly are not evolving into commodities very quickly, and laptops which did. Why is the market for tablets looking more like that of laptops than smartphones? Perhaps it is because of bundling: typically you buy a phone with a service package, while you don't buy a laptop that way.