Financial Times: Rival tablets ready to bite into iPad lead at a fraction of price

[Andre Kesteloot]

  Rival tablets ready to bite into iPad lead

By Chris Nuttall in San Francisco

Published: May 30 2010 20:30 | Last updated: May 30 2010 20:30


Supplies of the iPad have been limited but the low-priced rivals are 
expected to be plentiful

The international launch 
<http://www.ft.com/cms/s/2/7d2d1ffa-6a18-11df-b268-00144feab49a.html>of 
the iPad at the weekend is set to be swiftly followed by the release of 
a raft of rival tablet PCs, costing a fraction of *Apple 
<http://markets.ft.com/tearsheets/performance.asp?s=us:AAPL>*’s $500 device.


Tablets priced at about $100 will be unveiled at Computex in Taiwan, 
which begins Monday – the first major trade show since the release of 
the iPad in April.

Such low-cost tablets are part of a trend in the PC industry as 
component costs fall, with laptops and netbooks attracting low-cost 
competitors from relatively tiny companies across Asia.

Small Asian manufacturers such as Eken, G-Link, Bluesky and Kinstone 
will all be unveiling their iPad-lite models from Monday.

Meanwhile, a $75 tablet is expected next year from manufacturers 
supporting the One Laptop Per Child (OLPC) initiative to provide 
computers for disadvantaged schoolchildren, while consumers in some 
countries will be able to take advantage of free tablets from telecoms 
and TV providers in exchange for subscription contracts.

Apple’s products <http://www.ft.com/indepth/apple>carry a premium and 
supplies of the iPad have been limited but the low-priced rivals are 
expected to be plentiful and encourage mass adoption. Unit shipments of 
tablet devices are predicted to increase by 230 per cent over the next 
year, according to the In-Stat research firm, while Deloitte forecasts 
tens of millions of sales worth more than $2bn by the end of 2011.

“With pricing at around $100 and wireless broadband rolled out in both 
advanced and emerging economies to enable an “apps” infrastructure, this 
will definitely increase the size of the market,” says Richard Brown, 
head of marketing at chipmaker Via.

He expects its Prizm processors will be powering 50 tablets announced at 
Computex. Most will have limited memory and storage and will run 
web-based applications. With chips based on designs of the UK’s Arm and 
using *Google 
<http://markets.ft.com/tearsheets/performance.asp?s=us:GOOG>*’s free 
Android operating system, manufacturing costs can be as low as $60-$70, 
he says.

China is the source of the cheaper innovation, with the “shanzhai” 
bandit phonemakers of the grey market moving on to the manufacture of 
tablets that can use readily available smartphone components.

Chris Wei, senior analyst at Taiwan’s Market Intelligence & Consulting 
Institute, a government-backed research house, said “even a number of 
mainland Chinese brands that made netbooks” are shifting their focus on 
to tablet PCs this year.

But there will not just be competition on price, Mr Wei says. “The iPad 
is still in its first generation so it still has some some limitations 
that rivals will improve on”, such as by using more powerful hardware 
components or by supporting Adobe Flash content. A number of tablet PCs 
that will be shown at this year’s Computex have also been converted from 
“smartbooks” using Arm-based processors that were featured heavily at 
last year’s fair but never made it to retail stores because brands 
turned conservative about new products during the economic downturn, Mr 
Wei said.

“Some of these tablets, if you take away the outer casing it’s basically 
a smartbook inside,” he said.

Meanwhile, OLPC announced a partnership with chipmaker Marvell last week 
that it said would bring forward production of its third-generation 
device – a tablet – by two years, to the beginning of 2011.

Nicholas Negroponte, founder of OLPC, said the device would have a 
multi-touch screen capable of videoconferencing and HD video yet could 
cost as little as $75 due to the falling cost of components.

“I’ve seen many of the Chinese manufacturers make low-cost laptops and 
they have all been so junky and flimsy, so I hope we can influence 
things for the better with tablets,” he said.

Better known names are producing tablets at slightly higher prices. 
*Archos <http://markets.ft.com/tearsheets/performance.asp?s=fr:JXR>* of 
France has launched the 7-inch Archos 7 Home Tablet for $180, while 
Dell’s Streak will be offered through the O2 mobile carrier in the UK in 
June for a reported $100-$200, depending on the level of subsidy by the 
carrier.

The chipmaker *Broadcom 
<http://markets.ft.com/tearsheets/performance.asp?s=us:BRCM>* has shown 
tablets containing its semiconductors being adopted by telecoms, cable 
and satellite companies, such as Japan’s *NTT DoCoMo 
<http://markets.ft.com/tearsheets/performance.asp?s=jp:9437>*.