Nature abhors a vacuum; especially, it seems, in the tablet market, where PC kingpins Microsoft and Intel have not made an appearance. Their absence from the market and the easy availability of Android and low-cost, low-power ARM-designed processors could tempt every cell phone operator to launch their own tablet.
Broadcom senior marketing manager Leo Azevedo told Reuters the company expects more tablets to come to market, including some this year. There’s no surprise there as CE makers want to get into the lucrative tablet market before it’s too late. What is surprising is that Broadcom, which makes chips that go into the iPad, expects service providers to launch tablets.
We would expect most tablets launched in the next 12 to 24 months to use Google’s Android operating system and ARM-designed chips from the likes of Broadcom, Qualcomm, Freescale and Texas Instruments.
Intel and Microsoft do not currently have products that are suitable for tablets that could compete head-to-head against the iPad. Intel is trying to reduce the power consumption of its Atom processors. There are rumors it might acquire an ARM chipmaker to get back into the ARM market. Microsoft is putting the finishing touches on its upcoming Windows Phone 7 OS that might be suitable for tablets.
If mobile operators offer their own tablets, it will hurt sales by traditional mobile device makers such as Nokia, RIM, Samsung, Sony Ericsson and LG.
Azevedo did not provide a list of possible companies. Mobile providers, except for AT&T, have missed out on millions in subscription revenue from upwards of three million iPad owners… and still counting.
Verizon Wireless has already said it’s working with Google on a possible Android-based tablet. Sprint, T-Mobile and Clearwire are the other possible candidates to launch a tablet. Sprint and Clearwire need a 4G tablet, one that the three cablecos that are in on the Clearwire deal could also sell under their own brand.
Azevedo said Japan’s DoCoMo and the UK’s BT have tested Broadcom-powered tablets and he expects them to launch in this year’s third quarter.
It’s less likely that a pay-TV service would launch a tablet. However, a case could be made for the large pay-TV services like Comcast and DirecTV to launch a tablet for their subscribers to watch their TV Everywhere services. The cablecos have all shown interest in having their own mobile broadband service.
Azevedo said operators could get tablets made for between $70 and $120. At that cost, the operators could give them away to subscribers to commit to a 12- or 24-month contract.
Potential makers of Broadcom-based tablets, he said, include Gemtek, Moimstone, Asustek’s Pegatron and LG’s LG Nortel unit.
So why not? Android is free, well-known and has lots of apps. ARM-processors are available from multiple companies that are dying to sell chips. There are many low-cost device makers in Asia that would love to make tablets under a contract from a cell phone company. Wireline and wireless broadband operators could sell them through their own outlets, RadioShack or Best Buy by selling them at subsidized prices with a two year subscription as they do with netbooks.
Such a strategy would get the market to a “one person-one tablet” era much sooner than if only CE makers produce tablets.