BUSINESS
Year in review 2010: Smartphones and tablets stir things up
29-12-2010
by Deirdre McArdle
The iPad kickstarted the tablet PC market, while smartphone growth boosted the mobile sector.
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We first heard rumours that Apple was developing an e-reader or tablet-style device towards the tail end of 2009, but it was at the end of January this year that Steve Jobs finally unveiled the iPad, a tablet device with a focus on content like games, movies, newspapers/magazines and e-books. At first glance, commentators wondered who would buy the iPad, which looked like it had no 'killer app'. They got their answer in March when Apple opened up for pre-orders and over 120,000 people signed up. The massive interest caused analysts to hastily revise upwards their sales predictions to 5 million in the first year of the iPad's life.
Apple hits the jackpot with the iPad
As well as strong consumer interest, early reviews of the iPad from influential journalists such as Walt Mossberg and David Pogue were exceptionally positive, and when the device finally went on sale in the US on 3 April, some 300,000 units were sold in just one day. Within 28 days of its launch, the iPad had essentially become the hottest gadget on the US market, selling 1 million units.
In early May, Apple released a 3G version of the iPad in the US and promptly sold 300,000 units over its launch weekend. By the end of May, Apple had launched the iPad in nine countries worldwide and by the beginning of June sales of the device had rocketed to 2 million units.
iPad supremacy wards off competitors
These early impressive sales figures appeared to scare off other potential entrants to the market. In May, Microsoft shelved its Courier project, which was rumoured to be a two-screen, tablet-style device that could be used to read e-books, while on the same day HP announced it had killed its Slate tablet computer plans.
Dell did release the Streak at the end of May, but it turned out to be less tablet, more giant smartphone. In any case, it hasn't made too much of an impact on either market.
The Computex Taipei trade show in early June did introduce several low-cost iPad rivals, including ASUS' Eee Pad EP101TC and EP121 tablets, along with LG's UX10 tablet; however, it's fair to say that the iPad's dominance hasn't been affected by any of these devices.
Big names want in on the action
It wasn't until the latter half of the year that we began to hear talk of credible competitors to the iPad. In August it emerged that Motorola was rumoured to be developing an Android-based tablet device. Commentators suggested the Moto device could well threaten Apple's dominance, with Motorola's rumoured deal to support TV-watching capabilities, as well as support for Flash. Then in September, BlackBerry maker RIM announced the PlayBook, a tablet PC that will be launched in early 2011.
RIM and Motorola weren't the only big names to take an interest in the tablet market. In September, Samsung debuted its Galaxy Tab device, which is based on the Android operating system, and Toshiba lifted the veil off its tablet efforts with the launch of the Folio 100 (also Android-based).
iPad dominance set to continue
All of these potential challengers have a difficult task ahead of them if they are to gain traction in the tablet market. Research firm iSuppli predicted that 12.9 million iPads will be sold worldwide in 2010, representing a whopping 84 percent of the tablet market. Certainly the device is well on track to hit, if not surpass, the iSuppli estimates; in the second quarter Apple said it shipped 3.27 million iPads, while in the third quarter it shipped 4.19 million devices.
Looking ahead, iSuppli predicts iPad fever will continue -- it estimates that in 2011, 36.5 million iPads will be sold globally, rising to 50.4 million for 2012. And with the
Smartphones get people talking
Although the iPad claimed the vast majority of gadget headlines this year, the smartphone emerged as a star performer in the mobile phone market. During the year growth in the smartphone market reached epic proportions. In the third quarter, 77 million smartphones were shipped globally, representing growth of 78 percent year-on-year, according to Strategy Analytics. Even as ordinary mobile phone sales declined over the year, the growing popularity of smartphones kept the overall market in positive growth.
A strong smartphone portfolio became a critical asset for mobile phone makers in 2010. Apple, with its selection of iPhones, including the newest addition to the stable, the iPhone 4, which was released in June, has arguably made the biggest impact on the smartphone market. During the third quarter alone it shipped 14.1 million iPhones, a 91 percent increase on the previous year. The overwhelming success of the iPhone saw Apple become the fourth largest mobile phone maker in the world, the second 'smartphone-only' vendor to do so after RIM with its BlackBerry range.
Nokia feels the heat
The increasing emphasis on smartphones has put pressure on mobile makers like Nokia to develop a winning smartphone strategy, and fast. Nokia has struggled to produce an iPhone killer, or even just an iPhone challenger. Despite its lack of an iconic device, however, the Finnish mobile giant still maintains its top position in both the mobile phone and smartphone markets. And it is taking the threat to its dominance seriously; in September a management reshuffle emphasised the firm's determination to get down to business in 2011.
Android marches on
It's not just Apple that Nokia needs to be concerned about. Smartphones based on Google's Android operating system have been the real surprise hit of 2010. Sales of Android-based smartphones grew a massive 1,309 percent year-on-year from 1.4 million in the third quarter of 2009 to over 20 million units in the third quarter of 2010, according to research firm Canalys. Mobile phone makers like Samsung, HTC and Motorola all released popular Android-based devices during the year. In fact, Motorola's Droid smartphone has been credited with reversing the fortunes of the embattled mobile phone maker.
The success of its Android platform did not translate to a successful entry into the mobile phone market for Google, however. In January the firm announced the Nexus One, which Google said belonged in a new class of phones called 'superphones'. But this was one superphone that didn't quite learn to fly; just months after its release, following lacklustre sales, Google essentially pulled the plug on the Nexus One.
Microsoft too entered the smartphone market this year, through the launch of its Windows Phone 7 operating system, broadly considered to be the firm's last play for a place at the smartphone table.
What's in store for 2011
The upcoming year is likely to be an exciting one for the smartphone market. In December, Google said it would try again to make it in the market, this time with the Nexus S, developed with Samsung. We can also look forward to the release of the iPhone 5, which will address some of the problems experienced by the iPhone 4, including the infamous 'antenna-gate'. Also on the cards is the launch of 4G, a wireless technology standard that is widely expected to be a real game-changer for the smartphone market.
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