Tablet Market May Surge to $49 Billion

Apple (AAPL) and other electronics makers will generate $49 billion in sales of tablet computers by 2015, amid booming demand for devices that bridge the gap between smartphones and laptops, Strategy Analytics predicts.

Tablets are becoming readily available in a greater number of markets as companies such as Samsung Electronics (005930:KS), Motorola Mobility Holdings (MMI), Hewlett-Packard (HPQ), and Dell (DELL) rush to "copycat" Apple's iPad, according to the Boston-based research firm. "The strategic trend here is for personal and mobile computing to shift away from keyboards to touchscreens," says Neil Mawston, a Strategy Analytics analyst. "Competition is rising, supply is rising, so prices should fall over time."

Apple's rivals are releasing their own tablet-style devices to replicate the success of the iPad, which generated $9.6 billion in sales in the year since its April 2010 debut. North America, Asia Pacific, and Western Europe pose the biggest opportunities for tablet vendors, Strategy Analytics says. The tablet may surpass all other consumer electronic devices by sales, except for personal computers and TVs, it says.

Apple's IOS Dominates Tablet Market

Apple's iOS software, which powers its iPhone and iPad, will account for 69 percent of the market this year, research firm Gartner said this month, predicting that its share will decline to 47 percent in 2015.

When tablet developers begin gearing devices more toward content creation than consumption, the market may "easily" extend beyond $49 billion, says Abhey Lamba, an analyst at International Strategy & Investment Group in New York. "At least for the next couple of years, you can assume Apple will be the leader," he says. "This is going to be a fast-growing market and there's going to be a lot of announcements over the next one-to-two years, but very few of them are actually going to survive in the long run."

While tablet prices will begin to decline in about two years, Lamba says, Apple's "aggressive" pricing leaves little room for rivals to cut prices significantly.

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