With iPad 2, other tablets heading for a 'bubble burst,' analyst says
The tablet market is at “rising risk of a bubble burst” in 2011, says a J.P. Morgan analyst. Companies are planning a flood of devices to compete with Apple Inc.’s iPad, which currently dominates sales with nearly 15 million units last year. But with the iPad 2 going on sale Friday in what many are convinced will be a gangbuster debut, analysts are concerned that most other manufacturers will be left in the dust, sitting on a pile of inventory.
“The technical and form factor improvements of the iPad 2 stand to make it tougher for the first generation of competitive offerings to play catch-up, meaning actual shipments could fall well short of plan,” wrote analyst Mark Moskowitz in a report Wednesday.
He and fellow anlaysts expect tablet supply to outstrip demand by more than 17 million units, or 35.9% -- “which is not good,” he emphasized.
Tablet makers, including Apple, intend to build 81 million devices this year, though realistically they will probably produce just 65.1 million, Moskowitz wrote. But J.P. Morgan pegs shipments at just 47.9 million.
Other than Motorola’s Xoom and HP’s TouchPad, other alternatives to the iPad feature “limited differentiation and unattractive pricing,” meaning that consumers are less likely to go for the wannabes, according to the report.
-- Tiffany Hsu [follow]
Photo: The new Apple Inc. iPad 2 in both white and black finish. Credit: David Paul Morris/Bloomberg