Apple’s Tablet and the Future of Portable Media

Today, Apple will unveil the latest in a line of evolutionary moves to reinvent an existing product category. As detailed by Silicon Alley Insider, Apple has a steep hill to climb if it hopes to overcome a long history of failed attempts in tablet computing. Then again, with the iPod and iPhone, Apple has proven that it excels at polishing up a readily available product with superior design and a pleasing, intuitive user interface and then promoting it with the company’s trademark marketing prowess.

Moreover, what Apple has done, first with the iPod and subsequently with the iPhone, is demonstrate the power of combining alluring devices with complementary content and applications. And arguably, Apple has had the benefit of using the iPhone as a test bed for many of the features now offered on the tablet.

To a certain extent, Apple will be joining an industry-wide charge to embrace the tablet form factor. As I detailed in a previous post, tablets or slates figure to be a major theme this year in a broader drive toward portable computing. It’s still a small market relative to the equally portable netbooks, but the near-term story is more about growth. In its recent (and voluminously detailed) “Mobile Internet Report,” Morgan Stanley predicted that Internet tablet shipments (which also includes e-readers) will quadruple in 2010 and then triple again in 2011 before settling into a steadier growth pattern.

Growth in the tablet market coincides with a decline in gaming console shipments and a leveling out in personal media player shipments, suggesting that beyond their obvious impact on print content, tablets will become a major force in gaming, music and video as well. Morgan Stanley already predicted that Apple devices (iPhone and iPod touch) would become the second-largest handheld gaming platform worldwide by the end of Q4 2009, surpassing the installed base of the Sony PSP, and projected it could overtake Nintendo in the second half of 2011 thanks in large part to the tablet.

That’s yet another example of how the tablet builds on the substantial base Apple has already built with its current stable of devices. The company clearly aims to add print content to the mix, targeting a small but growing market dominated by Amazon and its Kindle. As I noted in my latest report (full text available to Total Access subscribers only), publishers seem resigned to the fact that mobile devices will become a staple of their business. Among the North American newspaper and magazine publishers surveyed by the Audit Bureau of Circulations, a whopping 85% acknowledged that more consumers will rely on mobile devices as their primary information source in the next three years. And over one-half believe that the business model of the future is a hybrid of ad support and subscriptions, which helps to explain Apple’s purchase of mobile ad network Quattro Wireless.

That Apple’s tablet will spark consumer lust is a near-certainty, especially in light of the constant drumbeat of buzz it has generated since rumors first surfaced about the device (an amusing rundown of which can be found here). Whether it will spark a commensurate level of sales is less certain. As a Technology Business Research analyst noted last fall in an interview with PC World:

“To say that a tablet could sell like the iPhone, no matter the price, is just crazy. You have to buy a phone, but you don’t have to buy a tablet. If Apple enters that market, Amazon’s Kindle aside, it will essentially have to establish the category.”

That’s the conclusion Forrester Research analysts Charles Golvin and James McQuivey reached in a recent blog post (also available on paidContent), but in essence, that’s what the tablet seems designed to do. And if there’s a company that can point to an established track record of genre-defining devices, it’s Apple.

Image Courtesy of Gizmodo.Com