Getting tired of all the hoopla surrounding Apple's (Nasdaq: AAPL) iPad tablet? That's understandable. Still, there's a good reason hardware vendors are falling all over themselves to launch iPad competitors.

Where the money is
The PC market is huge. And mature. Sales growth rates are low to negative. Unit shipments of PCs (desktops, notebooks, and mini-notebooks) grew a measly 3.1% year over year in the fourth quarter of 2010, according to Gartner. Since PC prices trend down over time, revenue growth is typically less than unit growth.

That makes it hard for PC makers to deliver strong earnings growth. Cost-cutting can boost the bottom line, but big PC vendors such as Hewlett-Packard (NYSE: HPQ) and Dell (Nasdaq: DELL) have been cutting costs for years. It's hard to imagine there's much fruit left on their cost-cutting trees. What's left is likely hard to harvest.

Where the growth is
As prices of notebook PCs fell, buyers increasingly chose notebooks over desktops. A few years ago, notebook growth held up even as desktop growth deteriorated. PC vendors emphasized mobile computing. In 2005, Lenovo acquired IBM's (NYSE: IBM) PC business and became a leader in notebook computers. The same year, HP listed mobile computing as one of three major IT market trends it was pursuing.

That worked -- for a while. Now notebook growth is stagnating. According to DisplaySearch, unit shipments of notebooks and mini-notebooks grew a paltry 1% in the fourth quarter of 2010. IBM's sale of its PC business looks prescient.  

Now what?
There is hope. In the fourth quarter, shipments of tablet computers increased from being nearly nonexistent the year before to 10 million units. Was that a fluke? Not according to a recent NPD Group study, which reports that 30% of tablet owners are using desktops less for email and Web browsing. The shift is only slightly lower for social networking, at 28%. A strong majority of owners reported being very satisfied with their tablets.

Apple versus … ?
The iPad had a 75% market share in tablets in the fourth quarter, according to Strategy Analytics. Success invites competition. Tablets using Google's (Nasdaq: GOOG) Android operating system are hot on the iPad's heels, jumping from a 2.3% market share in the third quarter to 22% in the fourth. Android's gains were almost entirely the iPad's loss.

The top-rated Android tablets on tech site CNET are the Samsung Galaxy Tab, Dell Streak, Barnes & Noble Nook, and ViewSonic ViewPad. Motorola Mobility (NYSE: MMI) recently introduced its Android tablet, the Xoom. Return rates on the Samsung, one of the first Android tablets on the market, are about 16%, compared to 2% for the iPad. It's hard to say what's driving the difference or whether an upcoming update of the Android operating system will help close the gap.

Looking beyond Android, last September Research In Motion (Nasdaq: RIMM) announced the BlackBerry PlayBook tablet, and earlier this month, HP launched the TouchPad tablet, which uses WebOS, acquired from Palm. 

It's too soon to tell which tablets will emerge as viable competitors to the iPad. That said, the iPad is almost sure to see its market share decline. iSuppli estimates that it will fall to 70% this year and 62% in 2012.

The law of large numbers
In evaluating the impact a new product can have on a company's earnings, it's important to compare the potential of the new product with the size of the company overall. HP's PC group accounts for only 32% of its revenue. In contrast, desktops and mobile devices account for 55% of Dell's revenue. Thus, tablets can have a far larger impact on Dell than on HP. Similarly, tablet success (or failure) could have a big impact on Research In Motion as it works to relieve pressure the iPhone has put on its BlackBerry.  

Foolish takeaway
Apple is the clear winner in the tablet wars. In Apple's most recent quarter, the iPad alone grew the company's sales by an impressive 29% from the year-ago quarter and accounted for 42% of sales growth. Yes, it's likely to lose market share as competitors enter the market. That said, the iPhone and iPod offer a guide to Apple's ability to fight off competition. The iPad could make it a triple crown. The remaining horses in this race largely appear to be high-risk, high-reward long shots.  

More on tablet PCs:

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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.