Surface. iPad. Nook HD. Kindle Fire HD. iPad Mini. The list
goes on and on. Consumers can try to escape the onslaught of new
tablets, but they are
inescapable
.
Apple (NASDAQ:
AAPL
) Sony (NYSE:
SNE
), Samsung, Asus, Acer, Dell (NASDAQ:
DELL
), Hewlett-Packard (NYSE:
HPQ
) and Barnes & Noble (NYSE:
BKS
) are among the many companies that have developed at least one
tablet. Some of these companies are attempting to expand the
market with the so-called tablet hybrids, which take advantage of
Windows 8.
Microsoft (NASDAQ:
MSFT
) released its first tablet, Surface, on October 26. In the days
after its arrival, the rumor mill began to churn out new reports
of an Xbox tablet. This device would be geared toward the gaming
market, which has already provided Microsoft with hundreds of
millions of dollars in annual revenue.
In 2013, all of the existing tablet makers are expected to
upgrade and re-release these devices. This will lead to a
fifth-generation iPad, a second-generation iPad Mini, a
third-generation Kindle Fire, and so on. If that were the extent
of tablet releases, consumers might be able to handle them. But
these upgrades do not even include the possibility of new
devices, which are sure to appear. Microsoft is not the only one
trying something different. The next 12 months are likely to
bring a wide array of new tablets from a large number of
manufacturers.
Stroll the aisles of any Best Buy (NYSE:
BBY
) to get a glimpse of the many tablets that have been produced in
2012. They are not all from big-name manufacturers.
From 2010 to 2012, the number of tablet producers has greatly
multiplied. Now Google (NASDAQ:
GOOG
) is getting into the mix, albeit with a little help from Asus
and Samsung. In 2010, Amazon (NASDAQ:
AMZN
) was not making tablets. Barnes & Noble was not either. But
they are now -- and they likely will be for many years to
come.
If the global market was large enough, this might be a
positive development. The industry is quickly approaching the
point of over-saturation. Apple has already sold 100 million
tablets. Between the various Android tablets available, it is
safe to assume that there are another 30 to 40 million on the
market. How many more tablets can these companies realistically
expect to sell?
Tablets differ from smartphones in that they are not throwaway
devices. Consumers do not buy them with the intent of acquiring a
new tablet in 12 to 24 months. Granted, there are some consumers
who happily upgrade every time a new iPad is released, regardless
of the associated expense. But if tablets
need
to be replaced frequently, consumers are likely to stop buying
them.
Right now it appears that there definitely are too many
similar
tablets on the market. Microsoft might be smart to develop one
for gamers, since that market has yet to be completely fulfilled.
But there are only so many differences that can be applied to a
device that is supposed to do everything.
Thus far, Apple, Google, Amazon and Samsung are the only four
companies that have had genuine success in the tablet space. In
2010 and for most of 2011, there was only one company on that
list -- Apple. Despite the company's success, at least one
analyst believes that Apple was forced to release the
fourth-generation iPad this fall because of
stale iPad sales
. That strategy seems to have worked. In just one weekend, Apple
sold another
three million tablets
.
Regardless, the tablet market can only go so far. With such a
large number of players entering the space, it won't be long
before tablet sales peak.
Follow me
@LouisBedigianBZ
(c) 2012 Benzinga.com. Benzinga does not provide investment
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