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Rival tablets ready to bite into iPad lead

By Chris Nuttall in San Francisco

Published: May 30 2010 20:30 | Last updated: May 30 2010 20:30

Supplies of the iPad have been limited but the low-priced rivals are expected to be plentiful

The international launch of the iPad at the weekend is set to be swiftly followed by the release of a raft of rival tablet PCs, costing a fraction of Apple’s $500 device.

Such low-cost tablets are part of a trend in the PC industry as component costs fall, with laptops and netbooks attracting low-cost competitors from relatively tiny companies across Asia.Tablets priced at about $100 will be unveiled at Computex in Taiwan, which begins Monday – the first major trade show since the release of the iPad in April.

Small Asian manufacturers such as Eken, G-Link, Bluesky and Kinstone will all be unveiling their iPad-lite models from Monday.

Meanwhile, a $75 tablet is expected next year from manufacturers supporting the One Laptop Per Child (OLPC) initiative to provide computers for disadvantaged schoolchildren, while consumers in some countries will be able to take advantage of free tablets from telecoms and TV providers in exchange for subscription contracts.

Apple’s products carry a premium and supplies of the iPad have been limited but the low-priced rivals are expected to be plentiful and encourage mass adoption. Unit shipments of tablet devices are predicted to increase by 230 per cent over the next year, according to the In-Stat research firm, while Deloitte forecasts tens of millions of sales worth more than $2bn by the end of 2011.

“With pricing at around $100 and wireless broadband rolled out in both advanced and emerging economies to enable an “apps” infrastructure, this will definitely increase the size of the market,” says Richard Brown, head of marketing at chipmaker Via.

He expects its Prizm processors will be powering 50 tablets announced at Computex. Most will have limited memory and storage and will run web-based applications. With chips based on designs of the UK’s Arm and using Google’s free Android operating system, manufacturing costs can be as low as $60-$70, he says.

China is the source of the cheaper innovation, with the “shanzhai” bandit phonemakers of the grey market moving on to the manufacture of tablets that can use readily available smartphone components.

Chris Wei, senior analyst at Taiwan’s Market Intelligence & Consulting Institute, a government-backed research house, said “even a number of mainland Chinese brands that made netbooks” are shifting their focus on to tablet PCs this year.

But there will not just be competition on price, Mr Wei says. “The iPad is still in its first generation so it still has some some limitations that rivals will improve on”, such as by using more powerful hardware components or by supporting Adobe Flash content. A number of tablet PCs that will be shown at this year’s Computex have also been converted from “smartbooks” using Arm-based processors that were featured heavily at last year’s fair but never made it to retail stores because brands turned conservative about new products during the economic downturn, Mr Wei said.

“Some of these tablets, if you take away the outer casing it’s basically a smartbook inside,” he said.

Meanwhile, OLPC announced a partnership with chipmaker Marvell last week that it said would bring forward production of its third-generation device – a tablet – by two years, to the beginning of 2011.

Nicholas Negroponte, founder of OLPC, said the device would have a multi-touch screen capable of videoconferencing and HD video yet could cost as little as $75 due to the falling cost of components.

“I’ve seen many of the Chinese manufacturers make low-cost laptops and they have all been so junky and flimsy, so I hope we can influence things for the better with tablets,” he said. 

Better known names are producing tablets at slightly higher prices. Archos of France has launched the 7-inch Archos 7 Home Tablet for $180, while Dell’s Streak will be offered through the O2 mobile carrier in the UK in June for a reported $100-$200, depending on the level of subsidy by the carrier.

The chipmaker Broadcom has shown tablets containing its semiconductors being adopted by telecoms, cable and satellite companies, such as Japan’s NTT DoCoMo.