Winning in Tablets Requires More Than Just Great Hardware

Gartner Inc. forecasts that the iPad's operating system will dominate tablets during the next few years, which says something about what Apple Inc. (Nasdaq: AAPL) is doing right.

The research firm forecasts that the iPad's OS will dominate the tablet market during the next few years. It also details how Apple is delivering more than just a tablet through the iPad's powerful and user-friendly interface. OEMs should take heed.

According to Gartner's report, Apple iOS will represent 69 percent of the tablet market this year and will show up in the majority of the devices sold during the next three years. In 2015, iOS will represent 47 percent of the tablet market.

The user experience Apple has created explains why iOS will have the leading share for the next few years. Indeed, it is the interface that makes users want to run apps on the iPad instead of on another tablet. The interface should only get better in the next-generation iPad.

"Apple iPad did to the tablet PC market what the iPhone did to the smartphone market: re-invented it," Gartner said. "A media tablet is not just a different form factor to perform the same tasks that can be done on a PC. Tablets deliver a richer experience around content consumption, thanks to the ecosystem they support."

Gartner's point is interesting -- Apple is transforming the tablet form factor into something new and exciting. While the graphics, processing power, battery life, and other mobile features are critical, they are in many ways the starting point; it's the overall user experience that really matters.

Take the iPhone, for example. In a nutshell, the tactile screens of the iPhone 1 and 2 are touch-friendly, and the icons and touch buttons are intuitively placed, so it's easy to navigate through the different applications. Then, there is the availability of the applications; the iPhone has more apps than any competing device.

The main lesson for OEMs is that it's not wise to launch a tablet in today's market if you think that the form factor alone will drive demand. That said, OEMs probably will flood the market in the coming years with hundreds of cheap tablets, in the hopes of making profits on very tight margins, without offering something truly revolutionary and competitive.

The tablet chip announced by Intel Corp. (Nasdaq: INTC) is a case in point. Intel is likely to target tablets with its upcoming "Cloverview" CPU architecture, and it will be interesting to see if Intel can manage to lower the power consumption of its x86 CPUs to compete with ARM Ltd. (Nasdaq: ARMHY; London: ARM) in the mobile space.

However, the odds are long that any manufacturer can use that incremental-at-best advance in processor technology to reinvent the tablet experience to the extent that Apple has done with its iPhone OS.

I mean, how often in history has any original equipment manufacturer successfully reinvented an electronic device?

The iPad could still face some formidable competition, of course. The BlackBerry (Nasdaq: RIMM; Toronto: RIM) PlayBook might have something to offer, especially for business users whom RIM has long targeted, although the reviews since its launch a few days ago have been less-than-stellar.

Also, if Gartner's forecast is correct, there are probably many more professional applications in the pipeline that will run on different platforms.

Google (Nasdaq: GOOG) Android tablet pricing could help boost demand for Android devices. But Android offers a meager number of apps, compared to the iPad. That number probably won't come close to eclipsing the number of iPad apps anytime in the near future.

There is always an opportunity for a smart OEM to offer something new and different that could steal market share away from the iPad, of course. But Apple has set the bar very high.