Hardware makers such as Dell
Now, Dell and HP might avoid tablets altogether.
The ghosts of tablets past
HP and Dell were Nos. 1 and 2 in market share in 2009. Now, if you include tablets, Apple is the leader in personal computers at more than 15% of market share, according to Asymco. How did HP and Dell, the top brands, miss the tablet renaissance? It's hard to believe it was only a short while ago, but the iPad came out in April 2010. The Dell Streak, a tablet-phone hybrid running on Android, came to the U.S. in August 2010 for the same price as the iPad, despite having only a 5-inch screen. Subsequently, Dell cut prices on the Streak, tried launching a tablet-only version with a 7-inch screen, delayed another version, and then scrapped the whole thing. The Streak really was a blur, and it lasted just a little over a year.
Still, the Streak lasted longer than HP's TouchPad, which had a lifespan of two months. The TouchPad launched in July 2011, more than a year after the first iPad was available, on its own webOS software that it acquired from former PDA king Palm. Former CTO Shane Robison commented that the tablet was "half a generation or a generation behind the iPad, and so that wasn't going to drive volume." The only way HP did drive volume was after terminating production and selling off its inventory at rock-bottom prices.
The ghosts of tablets present
Now, carefully treading where they were beaten before, Dell and HP looked to new Windows tablet software to help them conquer at least a share of the iPad's market. But while Dell and HP were working with processor supplier Qualcomm
This could affect projections that Windows will be able to grab 4% of the tablet market share for 2012, after having no market share in 2011. And even though Qualcomm promised that devices based on its Snapdragon processor would be thinner and lighter, run cooler, and offer better battery life than competitors, it may find it difficult to fulfill that promise if no one actually makes devices with its processor. Nvidia's Tegra 3 processor, on the other hand, could grab a bigger share of the mobile market with fewer device competitors. As Trefis reports, the company already expects Tegra 3 shipments to almost double in 2012.
The ghosts of tablets future
Stepping into hardware puts traditional software supplier Microsoft in direct competition with its customers. Unfortunately, its customers have little choice for a different operating-system vendor and will continue to use Windows on their non-tablet products. With Microsoft attempting to follow Apple's tight vertical-integration model to deliver better-quality products and customer experience, and Google also jumping into tablet hardware, traditional PC vendors could really be looking at the end of their consumer businesses.
On the other hand, Microsoft may be taking the best route for guaranteeing success of its mobile platform by taking control. After Dell and HP's previous tablet failures, Microsoft might be smart in hedging its bets with its own hardware. Additionally, Asus, Samsung, and Lenovo will still be launching Windows tablets, so there will be plenty of tablets that could help Windows win a significant market share.
Windows or bust
With mobile computing seemingly the future, Dell and HP's move to reconsider tablets might be their final decision to commit themselves to enterprise services. As they lose market share in consumer computing, Microsoft could pick up their slack. If you think Microsoft's new hardware venture could prove promising, check out its premium report that gives you three other reasons to buy the software giant, as well as three key areas to watch in the future. Not only that, but it comes with continuing updates to give you guidance on Microsoft in the year ahead. Get started now!
Fool contributor Dan Newman holds no shares of any of the above companies. Follow him on Twitter, @TMFHelloNewman.
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