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PC Manufacturers Phasing Out of Tablet Sector in 2012?

By - Source: DigiTimes | B 0 comment

Sources claim that PC vendors like Acer and Dell will phase out of the tablet business next year due to fierce competition from Apple, Amazon and Barnes & Noble.

Unnamed sources from the "upstream supply chain" believe that Acer, Asus, Dell, HP and other big-name PC vendors will likely begin to gradually phase out of the tablet sector in 2012.

According to the sources, these vendors don't have any kind of advantage over the likes of Apple, Amazon and Barnes & Noble due to their lack of strong content support and competitive hardware prices. As an example, Amazon is currently offering its Android-based Kindle Fire tablet for $199 whereas Barnes & Noble offers the Nook Simple Touch at $99.

Because of these competitive price points, "pure hardware players" are unlikely to profit from the tablet market in 2012. To make matters worse, it's believed that these devices will eventually be offered free given that Amazon and Barnes & Noble mainly profit from their content platforms.

Still, the sources also see troubled times for Apple. They point out that, while the iPad 2 still sees a strong demand, sales have been lower than those of the original iPad. This may indicate that enthusiasm for tablets on a whole may be quickly dwindling away.

Is this lack of enthusiasm based on tablet prices? As seen with HP's webOS-based TouchPad, consumers will scoop up a tablet left and right when the price is just right... or in this case, really cheap. Amazon estimates that it's $199 7-inch Kindle Fire will sell around 5 million units by the end of the year, or rather, in the first six weeks of its presence on the market. Apple's original iPad has sold 28 million units since its launch in early 2010.

"We believe the Fire's low $199 price point and broad distribution ... will help expand the market to consumers who previously may have been reluctant to purchase a higher-priced tablet," said JP Morgan analyst Doug Anmuth who believes Amazon will sell 20 million more units in 2012.

That said, is the overall price of each tablet the industry's bottleneck? Or is having a huge, feature-rich content service simply the key to launching a successful tablet? This may be what PC vendors have realized, and why they may phase out of the tablet sector next year. Still, perhaps Windows 8 will be their champion...

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