More tablets on the way
I continue to be very bullish about this semi-cycle outside of the PC-related sector. We continue to have this strong secular growth primarily in analog type chips for these new chip intensive applications like tablets, smart phones, smart grids, automotive and industrial.
The current caution by some may be somewhat justified in the PC space going forward. This would not be surprising since tablets are now increasingly substituting for cheap net book PCs which were driving the PC area lately.
Also I think the sector particularly outside the PC area will do fine with a slow to moderate growth economy.
I don't see any true double-dip and remain very bullish on the market in general as slow growth with decent profits, low interest rates, low inflation, and an extremely accomodative Fed is an outstanding environment for stocks. Obviously sentiment had gotten extremely bearish recently so we are well set up for the next leg up in the bull though I can't completely rule out a 1998 like retest of the correction lows around S&P 1010 in the Oct-Nov time frame.
Story on multiple new tablets below:
Samsung, Toshiba `Me-Too' Tablets Seek to Battle IPad
By Ragnhild Kjetland - Sep 3, 2010
Samsung Electronics Co. and Toshiba Corp. unveiled tablet computers in Berlin yesterday, aiming to take market share from Apple Inc.’s iPad with their lower-priced “me-too” devices.
Toshiba said at the consumer electronics fair IFA that the recommended price for its Folio 100 tablet in Europe is 399 euros ($511), undercutting the iPad, which goes for about 499 euros in the region. Samsung’s Galaxy Tab, which like Toshiba’s Folio will debut in Europe next month, said it will let phone operators determine the price.
“Looking at the iPad price, alternative tablets should be sold at below $300 to be appealing to consumers unless you have a strong brand to support the premium or a carrier to subsidize the hardware,” said Carolina Milanesi, a Gartner Inc. research director in the U.K.
Apple has sold more than 3 million iPad units since its April 3 introduction. The Cupertino, California-based company is “unlikely” to face a viable rival in the tablet market before 2011 and will continue to dominate the market in 2012, according to researcher ISuppli. Apple will have a 61.7 percent market share in 2012 in terms of units sold, from 74.1 percent this year, it estimates. ISuppli expects the tablet PC market to grow about five-fold between 2010 and 2012 to 81.6 million units.
“Apple has a huge jump on everybody in terms of the momentum that they’ve built at this point,” said Rhoda Alexander, an analyst at El Segundo, California-based ISuppli.
Crowded Market
Research In Motion Ltd. is planning to introduce in November a tablet with a 9.7-inch screen and Wi-Fi capability, according to two people familiar with the company’s plans. Verizon Wireless and Google Inc. have discussed a tablet that would run on Android software, and Dell Inc. released its $299.99 Streak 5-inch tablet last month.
Sony Corp., the world’s third-largest maker of televisions, said yesterday it hasn’t decided yet whether to offer its own tablet computer. It needs to be a “very appealing product that is going to be widely accepted, as opposed to a me-too product,” said Kazuo Hirai, president of Tokyo-based Sony’s Networked Products & Services Group.
Hirai said 23 companies are planning to bring tablet computers to market, making a price war inevitable.
Samsung and Toshiba said they see strong demand and expect to garner sizable market shares in the years ahead.
“Analysts are forecasting maybe 13 million units this year and next year they are forecasting 30 million devices, including the (Galaxy) Tab devices.,” said DJ Lee, Suwon, South Korea- based Samsung’s sales head for mobile communications. “In my view, the global demand could be even bigger.”
Market Share
Samsung, which expects to sell through major U.S., European and Asian carriers, even in China, will coordinate pricing with the operators, although “we are working to give people a very attractive and competitive price,” Lee said.
“The Galaxy Tab will be more favorably priced than the iPad, somewhat above 50 percent, 60 percent to 70 percent of what the iPad costs,” Niek Jan van Damme, a Deutsche Telekom AG board member, said in Berlin today. The Bonn-based company will offer the Samsung tablet and is in talks with Toshiba.
Tokyo-based Toshiba, whose 10.1-inch screen tablet will connect to the Internet via Wi-Fi networks, could get a regional market share of as much as 20 percent next year, said Gianluca Dianese, head of marketing for Digital Products and Services in Europe, Africa and the Middle East, said in an interview.
“It’s reasonable to expect a 15 percent to 20 percent market share by the end of 2011 in Europe,” Dianese said.
‘Premium Price’
Deutsche Telekom’s Van Damme expects the two companies’ products to be formidable competition for Apple.
“It’s not just a question of quality and functionality, it’s also a matter of price, of value for money,” he said. “Apple has a premium product, but also a premium price. There will be more customers who can’t necessarily afford that. Competition will ramp up.”
While price may help some of the manufacturers of tablets to grab market share, ISuppli’s Alexander warned it may backfire if profit margins aren’t high enough to keep pace with technological advances.
“If you aren’t getting the profit margin on that product, you’re going to have trouble keeping ahead in the leapfrog game which is part of this business: someone comes up behind you, jumps over what you’ve done and then you need to jump over them,” she said.
Tougher Competition
The greatest challenge for the “me-too” manufacturers will be marrying the content, operating system, touch technology and the various hardware components. Many will be picking from a pool of commonly available applications, as opposed to Apple’s approach of tailoring applications specifically to the device.
Gartner’s Milanesi said to avoid drastic price cuts, tablet makers may have to differentiate their products, especially as many work with Google’s Android as their operating system.
“All tablets will draw from the same ecosystem so differentiation will be hard,” she said. “The same as it is with smartphones.”
For many of the companies, the competition is only just beginning, Milanesi said.
“Competition will be tougher and tougher in the tablet segment, especially when Taiwanese and Chinese companies start making these devices,” she said. “To be appealing to consumers, tablets should be sold at below $300.”
At the Berlin show, Stephan Thiel, a 49-year-old banker from Hamburg, shopped around for tablets.
“The Toshiba tablet is very interesting,” he said. “I’m not sure I need all the applications that are on the iPad.”
The Toshiba tablet “is still quite expensive, but I like the screen and would use it at home, for example, to show photos and so on,” he said.
To contact the reporter on this story: Ragnhild Kjetland in Frankfurt at rkjetland@bloomberg.net
®2010 BLOOMBERG L.P. |
