Might There Have Been Life in HP's TouchPad?

By Tony Rizzo — November 23, 2011

U.S. tablet sales, excluding iPad sales, soared to more than 1.2 million units sold from January through October and brought in $415 million in revenue at retail, according to leading market research company The NPD Group’s monthly Connected Handhelds Report. Total tablet industry sales, for both hardware and accessories, brought in nearly $700 million.
Tablet hardware sales accelerated throughout the year with each quarter performing better than the prior quarter. Third quarter sales were two times that of second quarter sales and second quarter sales were three times better than first quarter.

"If you look at the tablet market without Apple there are a number of high-profile brands vying for that number two spot,” said Stephen Baker, vice president of industry analysis at NPD. According to NPD’s Consumer Tracking Service, 76 percent of consumers who purchased a non-Apple tablet didn’t even consider the iPad, an indication that a large group of consumers are looking for alternatives, and an opportunity for the rest of the market to grow their business.
PC manufacturers are dominant in the tablet space, as four of the top five tablet brands already have a strong U.S. consumer PC presence. Only two of the top five brands play in the smartphone market.
"The market is filled with long-time PC and phone brands as well as low-cost entrants," stated Baker. "With a limited amount of shelf space and challenges in overcoming the iPads first mover strength, not all brands will be successful."

It is true of course that Apple dominates the market for tablets, but one has to ask the question: Did HP pull the plug too quickly on a tablet that may ultimately have had some serious consumer sales legs to it? Ultimately HP did the right thing. Its tablet and mobile futures are to be found in the enterprise, not the consumer space, and as Microsoft's Windows 8 tablet strategy becomes well-defined, it also becomes clear what will drive HP's tablet initiatives. Enterprise tablet penetration is sill in its early days and we anticipate HP will be in the enterprise thick of it mid-decade.


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