Tablet computers have been a hot commodity in recent years. From kindles to iPads, the luxery of having a portable computer can be very convenient to a lot of people. The attempts to create and market a successful tablet computer have gone back a few decades, including attempts by Apple. This report will focus on the history of tablet models, its growth as the years have gone by, and reasons for current success.
The main goal of this research of the tablet industry is to gather information about the history, growth and success of the product. This analysis will be useful in coming up with a new market strategy for Apple. Providing that millions of consumers are interested in the iPad, much of this information should interest many people that enjoy using a portable personal computer for personal use, business use, music and much more.
There have been many attempts in creating a successful tablet that people want to buy and use every day, and recently the most successful, ground breaking products have risen. Some of the earliest devices were unsuccessful, with handwriting technology that labeled them as a failure. Some others just lacked the technology that would make devices like the iPad a revolutionary product.
The following report will include some of the earliest tablets models, their features, failures, and prices. Sales numbers will be included along with size dimensions. After the conclusion of the first, less successful models, the report will focus on the more recent, innovative tablet computers that millions of people around the world are interested in.
I will begin my analysis of the tablet industry, not just with Apple, but also with other companies that made their attempts at a quality personal digital assistant. Some of these tablets are from the early and mid 1990’s to early 2000’s, all with goals to launch a new industry in personal mobile computing. Some of the effort had success, while others were failures as certain features did not live up to the high expectations.
After reading the analysis of some of the first tablet models and then the current, high-level models, one would be able to see a separation in the technology that is offered by newer iPads, the difference in size and weight, and much more. Despite the lack of success of earlier tablet models, you will find that these prototypes have paved the way for the current, revolutionary tablet industry that has found a huge market with everybody’s attention. One of the first tablets that Apple came out with was the Newton Message Pad in 1993. It featured handwriting recognition software that was developed and marketed by Apple, though the handwriting feature received mixed results and was sometimes inaccurate (Smith). Other tablets came out in subsequent years, specifically in 1995 when Zenith came out with the CruisePad, and in 2001 when Bill Gates debuted the Compaq Tablet. The Compaq Tablet was equipped with touch screens and penwriting recognition abilities and sparked the tablet industry that would dominate the PC market in years to come (Smith).
Original newton MessagePad
The MessagePad released at MacWorld Boston on August 3, 1993. The tablet featured communication capabilities by fax and email, built-in personal organizer applications, and had the ability to recognize and interpret words written on the screen. It size wasn’t as big as the iPad, as it was 7.25 inches in height and 4.50 inches wide, weighing almost one pound (Bruni). Containing infrared beaming technology, consumers could exchange business cards with others that are close by. The personal computer could prove to be very valuable to many people every day with sending notes, faxes and messages, scheduling appointments, and easy portability. But limited battery life (14 hours) with AAA batteries along with the inaccurate handwriting recognition, the Newton never made the same impact as future tablets computers would, but opened up the road to it (Bruni).
The MessagePad’s variety of software was meant to aid in personal data organization and management, including apps called “Notes, Names, Dates”, along with a calculator, and time-zone maps. When it released, the first models ran for about $700 as later versions went up to $1000 (Failure). Over 200,000 Newtons were sold in 1993, with 80,000 in early 1994. Many of the consumers were disappointed with the poor performance of the handwriting recognition. As the Newton failed in the broad consumer market, it specialized to medical and educational purposes but still did not find much success (Markoff). Two years after the original MessagePad was released, a new MessagePad with an improved operating system contained a new character recognizer than was supposed to be a big step up from the original (Markoff).
In 1995 Zenith came out with a personal tablet device that was designed to allow the user to interact with that PC’s applications from a distance over a wireless network (Pen Computing). Although Wi-Fi was not around in 1995, Zenith used a spread-spectrum radio protocol that they called the CruiseLAN in its wireless approach. An attending physician from New York, O. Joseph Bruni expressed his liking for a tablet computer as it would provide great flexibility in the medical work place, “Physicians are very mobile within their work environment. They need a device that allows them to move about freely, while still allowing input and retrieval of information” (Pen Computing). This mobile PC is heavier than the Newton, weighing about 3.2 pounds with a 8.5 inch height.
When Bill Gates presented the Compaq Tablet in 2001, he offered the product as “a full-function Microsoft Windows operating system-based PC incorporating the convenient and intuitive aspects of pencil and paper into the PC experience”, aggravating many people in the tablet business that had already come out with MessagePads or CruisePads, for example (Pencomputing). The tablet would contain a mix of Microsoft Word and more handwriting recognition capabilities. Gates pledged that the tablet device would become the most popular form of the PC within the next five years (Berger, Niccolai).
Web services presented on the tablet would allow buyers and sellers to find each other easily through wireless internet business applications, provided companies with a wider choice of who they do business with (Berger, Niccolai). Another key member of Microsoft with Bill Gates, Robyn Pierce, presented how web services combined with Passport authentication service and an Excel spreadsheet would make filing expense reports easier. The application would search the Internet for an employee’s recent credit card transactions and cell phone calls and import that information to the Excel spreadsheet (Berger, Niccolai).
Bill Gates also presented a preview to the Xbox game console and boasted about the combination of wi-fi and mobile PCs, “wireless networking, advanced PCS, next-generation set-top boxes and video games will come together in a synergistic way as they connect to services on the internet” (Berger, Niccolai). The Compaq Tablet contained improvements from its predecessor tablets of other companies, such as a longer battery life and being much faster. It was also small and light though it carried similar dimensions and weight as the Zenith CruisePad. One could also purchase a detachable keyboard and the tablet could rotate 180 degrees, giving it flexibility in business meetings or presentations by just rotating the tablet (Franklin).
The Current State of the Tablet Industry
In this section of the analysis I will focus on the most recent, successful tablet releases. Specifically the iPad from Apple, the Kindle Fire from Amazon, and Samsungs Galaxy tablet. From this research, one will recognize the difference from the first tablets to the new iPad and more thriving tablets. You will notice the growth year after year with the iPad and how the competition from other companies introducing tablets will affect sales and growth.
Apple, Inc. Presents the iPad
On January 27, 2010 Apple introduced the iPad. It had similar features as the preceding tablets plus many other innovative traits. Using a wireless connection with the 2G network, browsing the web, reading and sending email, viewing photos and videos made the iPad a revolutionary purchase (Apple – iPad). Sophisticated technology of the Multi-Touch™ display “lets users physically interact with applications and content (Apple – iPad). Another groundbreaking feature is the size of the product. At .5 inches thick and weighing 1.5 pounds, the iPad is skinnier and lighter than any laptop or netbook.
Although it is true the CruisePad and the Newton were very expensive, the iPad with all of the new, innovative applications would be sold for $499 for the 16GB. The 32GB was sold at $599 and the 64GB $699. If taken care of properly, an iPad battery is expected to retain 80% or more of its original capacity during a lifespan of up to 1000 recharge cycles (Apple – iPad). In 2010, Apple sold 7.5 million units, producing nearing $5 billlion, a dramatic increase from even the most successful previous tablets (Apple – Form 10k).
One year later in March 2011, Apple released the iPad 2, which continued to surge Apple in the tablet industry as they saw a 334% increase in their units that were sold, from 7.5 million units to over 32 million, creating a 311% increase in net sales at $20 billion. There weren’t too many significant changes, but the addition of a rear and front camera with HD video recording gave the iPad an additional feature to stand out from competitors. The iPad 2 was also a little bit slimmer from 12.4 mm to 8.8 mm, thus making it even lighter than the original iPad (Berger, Niccolai).
Once again one year later Apple came out with its third iPad, continuing its torrent pace at the top of the tablet world. Selling over 58 million units (an 80% increase) to create $32 billion in net sales (59% increase). Even though sales continued to increase, they did not increase at the same rate as when the iPad 2 was released and could be due to competitors matching the iPad’s feautures and physical appearance (Apple – Form 10k). One of the few differences in the iPad 3 with comparison to the iPad 2 is the size and weight, both with minor increases. The inclusion of a 42.5 Wh rechargeable battery, doubling the size of the iPad 2 battery, the iPad 3 is .6mm thicker and is 51 grams heavier (itpro).
Samsung Galaxy Tablet
Samsung had introduced their Android-based tablet computer on September 2nd, 2010. At the time, this seemed to be the biggest rival to the iPad when comparing its software technology and other similar features. Sizing up at a 7-inch LCD screen with a front and rear camera, the Galaxy features touch response that is just as good as the iPad’s. The size is smaller than the iPad and is more easily supported with a single hand. While the iPad sizes up to almost 10 inches weighing 1.5 pounds, the Galaxy is just 7 inches with a weight of only .84 pounds, obviously creating a much smaller screen. The price of the first Galaxy tab was priced similarly as the 32G iPad, at $599, while the most recent Galaxy Note 2 is being sold at $300 (Kerr). As of November 1st, Samsung had sold over three million units of the Galaxy Note II in the first month after its launch (Phone Arena).
The Amazon Kindle
On November 19, 2007, Amazon came out with what they had be developing for over three years, a portable reading device with the ability to wirelessly download books, blogs, and pretty much anything else you want to read (Amazon). The first generation Kindle provided a revolutionary “electronic-paper” display with a high resolution screen that is supposed to look and read like real paper (Amazon). The screen has the sharp black and white appearance and readability of printed paper to enhance reading capability. With similar dimensions as the Galaxy and the MessagePad, the Kindle is 7.5 inches in height and 5.3 inches wide at 10.4 ounces. The tablet was sold at $399. Amazon must not have been prepared for the consumer demand as they sold out of the Kindle in just five and half hours (Engadget.com).
Over one year later, Amazon came out with the second version of the Kindle, which offered a text-to-speech option to read the text aloud. It also had increased battery life and the Kindle 2 was a bit slimmer than the first at just over one-third of an inch thick, which is almost as slim as most magazines (Kindle). The wireless technology allows you to download a book in less than one minute. From its release date, the Kindle 2 had its priced reduced from $359 to $299 and again to $259 (Amazon cuts price of Kindle). Amazon would come out with third, fourth and fifth generation Kindles in subsequent years. Each update provided improved memory space and battery life as well as updated wireless technology.
On September 28th, 2011, Amazon announced that it will come out with its mini tablet version of the Kindle, the Kindle Fire. With its 7 inch multi-touch LCD screen, the Fire also contained Google’s android operating system. While the cost of producing the Kindle fire is estimated around $190, it would only sell for $199, giving a low profit margin of around 4% (Myslewski). Throwing in the manufacturing costs would make turn the profit margin into a loss. Though it seems odd that Amazon would be willing to sell this product for a loss, the main goal was to get consumers on to the online store to purchase much more expensive applications, books, etc (Myslewski).
Looking back, Apple’s first attempt at a personal tablet was a failure. It did not sell like its current models and didn’t have the technology either. The MessagePad didn’t find much of a market and had a hyped handwriting feature that did not work like it was supposed to. The Zenith CruisePad had some versatility in the workplace, allowing users to interact through a wireless network, but also didn’t find much of a market. The Compaq provided new web services and had faster, better handwriting recognition and may have paved the way for the extremely successful current tablet industry. Apple’s first iPad with its light weight and easily portable body was an innovative product. Below is an illustration that presents the sales numbers for the different tablets that were summarized in this report.
As shown in the figure 1 above, Apple’s iPads have been dominant in the tablet industry, easily outselling its competitors from Amazon and Samsung. With thousands of applications and easily accessible wireless internet, the iPad quickly became a fun and easy way to do business, listen to music, and much more. While no other tablet company presents a major threat to Apple’s iPad, the Kindle Fire sits at number two on the top sellers list, selling seven million units (as of October 2012) compared to Apple selling 58 million iPad 3’s (Chen). Figure 2 presents the differences in the tablet prices as they were introduced.
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