Apple's domination of the tablet computer market appears close to unshakable as would-be rival Hewlett-Packard falls flat and Apple's production line reportedly gets ready for the third-generation iPad.
Hewlett-Packard's webOS-based TouchPad never really left the launchpad, gathering dust on the shelves of retailers like Best Buy. On Thursday, the company said it would end support for TouchPad and other webOS products as it reorganizes, and likely would spin off the Personal Systems Group that has run the personal-computer end of its business.
Missed Targets and Milestones
"HP is implementing a plan to fundamentally transform the company," according to a statement made by HP with its quarterly earnings report. An important component of the plan is focusing its "investments, resources and management attention to drive higher value solutions" -- focusing on enterprise customers, small and midsize businesses, and public sector customers.
In a separate statement, Palo Alto, Calif.-based HP said it would drop the TouchPad and webOS smartphones because the devices "have not met internal milestones and financial targets," adding, "HP will continue to explore options to optimize the value of webOS software going forward."
HP acquired webOS as part of its $1.2 billion acquisition of Palm Inc., in April 2010. Best Buy has been stuck with a large inventory of the devices, the Wall Street Journal's AllThingsD blog reported this week, with only about 25,000 of 270,000 TouchPads that were shipped to the chain having been sold to-date.
As a back-to-school promotion, HP initially knocked $100 off the price of the TouchPad, taking it down to $399 for the 16GB model, and $499 for the 32GB model. Then, the company made the price-cut permanent last week.
"Despite a large marketing and TV advertising campaign for its TouchPad tablet, HP was not able to net meaningful gains from its $1.2 billion acquisition of Palm," said mobile devices analyst Jeff Orr of ABI Research. "HP has also been increasingly vocal about its plans to move away from the consumer computing market, which didn't bode well for the launch of the new webOS devices."
Still Sweet for Apple
But in a veritable study in contrast, The Wall Street Journal reported Friday that Apple Computer's component suppliers and its iPad manufacturer, Hon Hai Precision Industry in Taiwan, are ready for trial production of the iPad 3, beginning in October. The paper cited unnamed sources familiar with the situation.
The Journal said the next iPad will have a 9.7-inch touchscreen display like its predecessors, but with a higher resolution display: 2048 by 1536 pixels, compared with 1024 by 768 in the current iPad. The component orders are enough for 1.5 million iPads to be made in the fourth quarter of this year, for an early 2012 launch.
The first two iPads hit the market in April 2010 and March 2011. An estimated 28 million iPads have been sold as of June, including another 9 million in the third fiscal quarter.
Competitors mostly have had a hard time getting the attention of consumers who never considered owning a tablet until Apple convinced them they needed one. But a few tablets like Samsung's Galaxy Tab, based on Google's mobile operating system, Android, have gained traction in the market.
"It was inevitable that Apple's share of the media tablet market would decline from 95 percent-plus a year ago, simply by the presence of competitors," Orr said.
What innovation could Apple add to the next-generation iPad?
"Look to additions on the iPhone as an indicator of where the iPad may go," the analyst said. "Namely, the iPad needs to find a reason to 'go outside' and leave the confines of the home network. This might mean device-based payments using NFC technologies or engaging applications using augmented reality."
Although it may be tempting to make the iPad lighter and faster, as it has done with its MacBook Air, Orr said that would raise the cost.
"Considering Apple has not received significant price pressures from larger competitors, it will likely seek to maintain street prices rather than drive them up," he said.