A Reminder On The Scale Of The Tablet Opportunity

Apple is about to announce its new iPad. We think we’re in a post-PC era where smartphones and tablets will become the dominant computing device. We forecast that sales will reach 500 million units a year by 2015

Read on for the broad strokes our take on the future of the market and what we’ll be looking for today. 

First of all, as the PC market stagnates, smartphones and tablets are taking off. Tablets, while still relatively pricy, have seen incredible adoption:

Global Internet Device Sales

We believe tablets are going to be the main computing device soon. We agree with Steve Jobs when he said traditional PCs would be to tablets as “trucks” to cars: still around, still a big market, still widely used, but no longer the default device for most people. Therefore, we anticipate the market to grow very big:

Tablets Unit Sales Forecast

Photo: Business Insider Intelligence

What’s more, as economies of scale happen, the price of tablets should go down, which would further boost adoption. At $500, tablets are a rival for many PCs, but still don’t make sense as a secondary device for lots of people. As the prices go down, many people will buy tablets.

Tablet ASP

Photo: Business Insider Intelligence

Even with tablet prices going down, we’re still looking at a very large market:

Projected Tablet Revenue

Photo: Business Insider Intelligence

With all that said, beyond product specs and the like, what are we expecting from today’s event? There are two things we’ll be looking for:

  • Hopefully updates on Apple’s media platforms, particularly its recently-announced textbook tools, but also apps, games, books, movies… A media ecosystem is a key element in a successful tablet, and Apple is a leader at this.
  • Most importantly: whether Apple will come out with a cheaper tablet. The iPad’s only worthy competitor so far has been Amazon’s Kindle Fire, which undercuts it. Many analysts expect Apple to cut the price on an older iPad model to attack the lower end of the market. Plenty of people would buy the original iPad at $250, and that would be a great value over the $200 Kindle Fire. That would be a game changer. If Apple doesn’t do that, however, Amazon still has a big shot at shaking up the market.

Click here for our full tablet forecast →

Here’s why we weren’t impressed by Apple’s big education initiative →

Here’s why we think the Kindle Fire will be a blockbuster →

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