apple logo header War of the Tablets: Apples iPad, Amazons Kindle & Microsofts Slate

By Ethan Lyon, Senior Writer

Apple is going to be a major competitor in the tablet market with its much-anticipated, iPad. Apple, Amazon and Microsoft are vying for market leadership in what is “expected to be the PC industry’s hot new category for 2010,” writes Information Week.

Apple has set the industry standard with its iPad, with a clear opportunity for market leadership. Amazon is poised to be the #2 market competitor as it adds more tablet-like features to its successful Kindle. We anticipate the Windows 7-powered HP Slate to take the #3 position in the tablet market.

Historically, Apple’s products are category game-changers (think the iPod in the MP3 market and the iPhone’s touchscreen and app store in the smartphone market). Apple has home-team advantage with its touch-screen technology and will surely deliver a higher-quality user-experience over Amazon’s Kindle and Microsoft’s Slate. If consumers are willing to pay a potentially higher price for a better user experience, then Apple will be the market leader.

Amazon’s Kindle is certainly poised to take the #2 position. Amazon is transforming its e-reader into a tablet with new features, such as internet connectivity and apps. Amazon can leverage Kindle’s existing user-base to generate revenues. The Kindle has 90% e-reader market share and analysts estimate the Kindle to reach $2 billion a year by 2012.

Microsoft is taking a different approach. Microsoft learned a hard lesson in the MP3 market with its disappointing, Zune. Instead of developing the tablet hardware, Microsoft is providing the operating system for HP’s Slate. By leveraging the leader in the PC market, Microsoft could make some traction in the table market.

Unlike the MP3 market, Apple does not have a clear leadership position — giving Microsoft and Amazon’s Kindle a fighting chance. However, the tablet is a new, cutting-edge product and Apple’s core brand competency is innovation. This inherent quality could give Apple the advantage it needs to be the market leader (promotion: e-course to boost app sales) .

The one area Amazon and Microsoft can compete, is price. Traditionally, Apple’s products are more expensive than its competitors. If consumers want a tablet, but don’t want to pay Apple’s high prices, Amazon and Microsoft generate significant market share.