Waiting for an iPad Killer? Don't Hold Your Breath.

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Just like every other "revolutionary" product that Apple (Nasdaq: AAPL  ) has released, the iPad will have to face off against numerous imitators out to steal its thunder. As a slew of phones running Google's (Nasdaq: GOOG  ) Android give Apple a tough fight in the smartphone space, it's understandable that some investors worry about how an upcoming flood of tablet releases featuring Android, Hewlett-Packard (NYSE: HPQ  ) subsidiary Palm's webOS, or Research In Motion's (Nasdaq: RIMM  ) Blackberry OS could dent iPad sales.

Nonetheless, the tablet market isn't the smartphone market. There are several big reasons why the iPad should continue to rule the roost in the near term.

Building a good tablet isn't easy
Apple went to great lengths to adapt its iOS operating system, and the core apps that come preinstalled with it, for a tablet's form factor. Chances are that it will take a while for Google to do the same with Android, or RIM with the Blackberry OS. In addition, Apple's hardware design accomplishments with the iPad were no mean feat. Rival manufacturers will have trouble matching the iPad's stellar battery life – especially if they want their tablets to deliver processing power that's competitive with Apple's proprietary A4 chip.

Apps, apps, apps
Thanks to the iPad's hype and early success, the App Store now carries more than 10,000 apps specifically written for the device. Android has recently made a lot of progress in narrowing the iPhone's lead when it comes to available smartphone apps, but it took a long time to do so. Now it looks like Android will be playing catch-up all over again in the world of tablets.

As for RIM and HP? Considering how badly their operating systems have fallen behind when it comes to smartphone app support, there's little reason to think that they'll be more successful in the world of tablet apps.

AT&T is less of a problem
I've gotten the crazy impression that the iPhone's reliance on AT&T's (NYSE: T  ) shaky mobile network within the U.S. has cost it some sales, and given Android smartphones a leg up. While the iPad also relies on AT&T's network, I think this tie-up will do far less sales damage. First, many of the AT&T-related complaints for the iPhone involved dropped phone calls, which obviously isn't an issue for a tablet. Second, subscribing to a 3G data plan for the iPad doesn't require a user to sign up for any kind of mobile phone service contract. Thus, unlike with the iPhone, users who prefer to go with Verizon (NYSE: VZ  ) , Sprint (NYSE: S  ) , or T-Mobile as their mobile service provider have been able to snap up 3G iPads without any trouble.

Many of the iPad's competitors will have an edge over Apple in terms of pricing, especially after factoring in the carrier subsidies that will be attached to some of their 3G tablets. Perhaps this pricing edge will force Apple to rethink its tablet business model and offer subsidized versions of the iPad (in conjunction with 3G data service contracts).

But that's the only chink in the iPad's armor for now. If pricing isn't too much of an issue, the combination of the iPad's early lead and competitive strengths mean that Apple should remain the undisputed colossus of the tablet market for at least the next 12-18 months.

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Fool contributor Eric Jhonsa has no position in any of the companies mentioned. Google and Sprint Nextel are Motley Fool Inside Value picks. Google is a Motley Fool Rule Breakers selection. Apple is a Motley Fool Stock Advisor recommendation. The Fool owns shares of Google. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy.

Read/Post Comments (3) | Recommend This Article (4)

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  • Report this Comment On August 17, 2010, at 9:15 PM, alexkhan2000 wrote:

    Apple will have a tough fight in the smartphone market as they compete with all the Android phones from dozens of manufacturers, but I think Apple has a good chance to be dominant and keep that position in the tablet market. I think the tablet's form factor really plays to Apple's strengths - especially in their total control over both the hardware and the software. They've got a major head start with millions of iPads out there already and thousands of apps that are iPad-specific. Like Apple did with the iPod in the mp3 player market, they could potentially dominate the tablet market with the iPad.

  • Report this Comment On August 17, 2010, at 11:50 PM, BR14 wrote:

    I tried the iPad and I really don't get the fuss. The keyboard is awful for a device of that size.

    I can see there could be a market for the pad form factor as a presentation device, for browsing the net; for reading (though the Kindle is better) or for video (other cheaper devices just as good).

    But since many of us have to carry a laptop anyway, it just doesn't work as a mainstream device.

    Naturally the usual Apple devotees will have already added the device to their collection, but what about those of us that require more convincing.

    For example what if that device fits in your car as it's navigation and media centre; is removeable; connects automatically via your phone (rather than having to have two cell accounts); and has all those great iPad features.

    With that kind of function I'd be interested even with the crappy keyboard.

    My guess is its coming soon so I think I'll wait.

  • Report this Comment On August 19, 2010, at 4:12 AM, kitikatism wrote:

    toshiba has made tablet computers for years. the only thing revolutionary that apple did was put their name on one and charge ppl twice of what they should have. plus by this time next year there will be hundreds of android and windows versions. even k-mart is selling cheap ones.

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