The speed of the smartphone and mobile computing caught several large firms asleep at the wheel. Beyond Intel
Big plans, failed dreams
Chief among these was LG, the third largest mobile company in the world. While LG ships nearly 30 million mobile units per quarter, which is roughly 9% of global market share, researcher Gartner pegs its smartphone market share at just 1.2%.
So LG's playing a game of catch up, but still didn't spare any bluster when announcing smartphone sales goals and a new tablet concept back in August. Chang Ma, the VP of marketing for LG's mobile devices, compared LG's tablet favorably to Apple's
Well, it's nearly two months later, and we have an answer to what LG's been hiding up its sleeve: nothing.
Android: a work in progress
Bloomberg recently reported that LG's shelved its tablet ambitions until next year. The culprit: Google's Android operating system just isn't ready for tablet prime time yet. While Apple's iOS has shown that smartphone operating systems scale very well to tablets, that comes with plenty of added development from Apple to ensure apps transition well from the iPhone to the larger iPad.
In addition, Apple has courted an impressive array of developers to design apps suited specifically for the iPad; there are now more than 30,000 iPad-specific apps. Android apps aren't currently optimized for larger screens, and many apps won't run at all on tablets.
Rather than follow Samsung, Toshiba, and other tablet suppliers into offering a less-than-optimized tablet experience with the current generation of Android, LG is waiting for Google to deliver a new version, named Gingerbread, that's optimized for tablet computers.
While I can't fault LG's decision to wait for a better tablet, their tacit admission that Android isn't ready to take on the iPad in its current form is bad news for companies whose tablet ambitions rely on Android. It means that there shouldn't be competitive Android tablets during the crucial holiday season, and also enables Apple to build up a further content advantage as apps optimized for the iPad continue pouring in.
Chipmakers, more to lose?
However, the companies with more to lose might be the chip makers salivating at Android-based tablet sales. LG's announcement that they were developing a tablet was paired with news they'd be using NVIDIA's
Other companies like Texas Instruments
Is Marvell damaged goods?
One last company seeing tablet fortunes swing against it might be Marvell Technology
Seeing as how Marvell not only has a long history of developing ARM processors but also holds a valuable "microarchitecture" license which allows it to make further modifications to ARM's processor core technology, this is a major blow. You'd expect stronger performance from a top-of-the line processor that was announced at the beginning of 2010. More importantly, any damage between Marvell and RIM that could spill over into smartphone designs would be an enormous blow to the company.
More reason to love Apple
The bottom line is that while Apple was initially critiqued for the iPad essentially being a large copy of the iPhone, the quality of Apple's launch stands far above rivals who will be nearly a year behind Apple in launching optimized tablets.
As these competitors fall further behind Apple continues its dominating content lead and also gains more scale to acquire cheaper components. That's bad news for competitors whose main tablet selling point is an ability to undercut Apple's selling price.
For investors dreaming of tablet riches, if your portfolio doesn't include Apple, it looks like the tablet boom just took a detour. While companies like Texas Instruments, Qualcomm, Marvell and NVIDIA still stand to see long-term benefits from tablets, for the time being, investors in these companies will have to be content with Android's stunning smartphone ascent.