Tablets: The scramble to be second

Cliff Edwards and Peter Burrows
18 May 2010
00:00
 
Dell will introduce a 5-inch tablet using Google's Android operating system in June. It is in the process of redesigning follow-on devices to deliver larger screens and new software by early next year, says Neeraj Choubey, director and general manager of Dell's tablet group. Jerry Shen, CEO of Taiwanese PC maker AsusTeK, says his company is accelerating its development of an Android-based tablet.
 
The company still will sell a Windows version. One advantage of Android, developed by Google, is that it runs about 40,000 applications, over 30 times more than Windows' 1,200 mobile apps. Verizon Wireless says it is in talks with Google about creating a tablet.
 
Apple's rivals may have trouble coming up with an iPad-beater. Apple chose every part in the iPad to conserve power. The company used a specially designed battery, as well as custom-made microprocessors. With other products, it has often turned to chips made by Intel or designed by ARM Holdings.
 
"The battery life on this thing is like black magic," says Dave Eiswert, who runs T. Rowe Price's Global Technology Fund. Designing components in-house hasn't been the norm at companies like Dell and HP, which in the past have outsourced design to Taiwanese manufacturers to cut costs. Both companies are expanding their own design teams.
 
The PC giants have a reason to hope they can keep pace. There are only 5,000 apps designed for the iPad. That means Apple's head start will not be as formidable as it was with the iPhone, which now has more than 195,000 apps.
 
Theo Gray, co-founder of software maker Wolfram Research, recently ditched his laptop and used only his iPad on a business trip. "It was totally fine," says Gray. "In terms of trend-setting, it's already too late. Apple has set the trend. The only question is whether everybody else can catch up."
 
The bottom line: Tablets may reach 25 percent of the PC market by 2015, which puts pressure on Apple's rivals to respond to the million-plus-selling iPad.
 
Edwards is a correspondent in Bloomberg Businessweek's San Francisco bureau. Burrows is a senior writer for Bloomberg Businessweek, based in San Francisco.
 
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