Competition will force more than half of the manufacturers to drop out of the market within two years
(Bloomberg) — Sprint Nextel Corp. said the craze for tablet computers in the U.S., led by Apple Inc.'s iPad, will temper as competition forces more than half of manufacturers to abandon the market in the next two years.
"You'll probably have a good dozen players by the end of this year, and then in two years you'll probably see just five that are really playing in the space," Fared Adib, vice president of product development for Sprint, said in an interview in Barcelona today.
Sprint, the third-largest U.S. wireless-service provider, will introduce the Research In Motion Ltd. PlayBook tablet this year and is already selling the Samsung Electronics Co. Galaxy Tab. The carrier has said it will begin selling a third tablet this year that will work on its so-called fourth-generation network, which offers faster Web browsing and video downloads.
A number of tablets are "essentially a phone operating system on a tablet," rather than devices with software and features to take full advantage of the tablet format, Adib said. He said the Overland Park, Kansas-based carrier is considering other tablets that use Google Inc.'s Android software, in addition to the Galaxy Tab.
The iPad accounted for 75 percent of global tablet shipments last quarter, according to research firm Strategy Analytics. Android tablets captured 22 percent of the market.
Hewlett-Packard Co. unveiled a tablet called the TouchPad this month that uses software acquired in last year's purchase of Palm Inc. Dell Inc., which already sells Android tablets, said last week it also plans to unveil a tablet using Microsoft Corp.'s Windows 7 operating system this year.
Motorola Mobility Holdings Inc. introduced a tablet computer called Xoom last month that runs on Android. RIM's PlayBook will use its own operating system.
"There's going to be a period of intense competition and innovation" in tablets, Steve Mollenkopf, executive vice president at chipmaker Qualcomm Inc., said in an interview in Barcelona. "There will be some winners and losers on the operating system side."
Sprint fell 7 cents to $4.53 at 1:03 p.m. in New York Stock Exchange composite trading. It had added 8.7 percent this year before today.