In a report on May 28 by PC Magazine, the company said that tablets will be more popular than laptops this year. While the idea that tablets will dominate the more traditional way of mobile computing isn’t news, the fact that it could be the more popular selection this year is surprising. Market research company IDC, which was quoted in the article, said tablet shipments are set to increase this year by nearly 60% over last year.
If IDC is right and the future is now, where can you put your money to profit from this sector?
Speaking of titans
The obvious choice is Apple Inc. (NASDAQ:AAPL), which has led this field with the largest market share, at 40%. Others have come and gone, with Dell Inc. (NASDAQ:DELL) and Blackberry making sad attempts at gaining some sort of market share. But while they may try to emulate Apple Inc. (NASDAQ:AAPL), it ends up being akin to a five-year-old trying to bake a batch of grandma’s delicious cookies without a recipe. Apple Inc. (NASDAQ:AAPL) is the godfather of tablets and while others can attempt to emulate the computing giant, there is little hope of stopping the monopoly that this company appears to have on good ideas.
As profits look set to continue to soar for Apple Inc. (NASDAQ:AAPL), Microsoft Corporation (NASDAQ:MSFT) is not a leader in the tablet market, so this isn’t the place to put your chips. The Microsoft Corporation (NASDAQ:MSFT) Surface RT has been another massive disappointment for the company, a letdown that was accented by the user-unfriendly Windows 8 operating system. The firm cut the price for its tablet recently, after launching the device about a year ago to compete with the Apple Inc. (NASDAQ:AAPL) iPad and Amazon.com, Inc. (NASDAQ:AMZN)’s Kindle Fire. The Microsoft Corporation (NASDAQ:MSFT) Surface has a measly 1% share of the $64-billion tablet market. The Apple Inc. (NASDAQ:AAPL) iPad is, and always has been, the chosen gizmo.
It should be noted that Microsoft Corporation (NASDAQ:MSFT) is the only company out of the main tablet makers that doesn’t offer a mini version, and this is one of the reasons that it has a low market share. The company is rumored to be releasing a mini version in the months ahead. NDP DisplaySearch analyst Richard Shim said Microsoft Corporation (NASDAQ:MSFT) will take its Surface and shrink it.
What about Amazon.com, Inc. (NASDAQ:AMZN)?
Amazon.com, Inc. (NASDAQ:AMZN) isn’t the place to put your money if you are looking to profit from tablets.
While I think the company will continue to dominate in other areas, the firm isn’t as innovative as Apple. In fact, despite Amazon.com, Inc. (NASDAQ:AMZN)’s Kindle Fire being popular and a breakthrough in its own right, it lacks the scope of the Apple iPad. The Kindle Fire is essentially limited to reading, which is also offered on the iPad and many other tablet devices. It should be noted, though, that the Kindle Fire is priced much lower than many other tablets. This isn’t enough on its own, however, to make Amazon.com, Inc. (NASDAQ:AMZN) the company to go to in an effort to profit from the tablet boom.
Why the tablet trend?
Many credit tablets for being elegant and simple, and this is fueling much of the transition. Furthermore, tablet prices are expected to drop this year by 10.8% to $381 on average. Comparatively, the average price for a PC is around $635. Tablets are also expected to decrease further in price, which will attract an even larger cross-section of customers. If Apple keeps a lock on the tablet market, which it appears to be doing, then Microsoft Corporation (NASDAQ:MSFT) will become more of a computer of the past while Apple continues to hit new heights.
Phillip Woolgar has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Apple. The Motley Fool owns shares of Amazon.com, Apple, and Microsoft. Phillip is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.
The article Tablets Will Be More Popular than PCs This Year originally appeared on Fool.com is written by Phillip Woolgar.
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