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Monday, June 13, 2011

Tablet war pushes PC makers to focus on R&D


EMILY MICHOT/MIAMI HERALD
Tablet use is growing nationwide not only for personal but professional use. Cardiologist Jose Soler uses an app on an iPad to review medical tests of one of his patients at Northwest Medical Center in Margate, Fla. Manufacturers are working to catch up with Apple’s two-year lead in the tablet market.
It’s a marked shift for companies that have long relied on Microsoft Corp’s Windows operating system and Intel Corp’s chips — a partnership referred to as Wintel — in leading the way in the PC industry’s core innovation.
“The situation is changing,” said Acer President Jim Wong in an interview during the recently concluded Computex exhibition. “It’s more open. ... No more Wintel. ... The industry is evolving.”
The evolution was highlighted by IDC data released this week showing the PC market slowing down even at a faster rate than first expected. IDC cut its PC shipments growth for this year to 4.2 percent from 7.1 percent.
The decline has in part been blamed on the growing popularity of tablets, led by Apple Inc’s iPad. This has prompted PC makers to roll out their versions of the device. Wong compared the rise of tablets to the early years of the PC, which were marked by “many years a lot of innovation” before it led to “a very common design.”
Wong said he sees innovation ramping up in the tablet and overall mobile space before the push to differentiate weakens as the market matures. “It’s just a cycle,” he said. “So the industry just keeps going up and down. And that is the reason why our R&D is going to grow.”
Analyst Shaw Wu of Sterne Agee said he sees a similar pattern of commoditization when it comes to tablets. “We believe tablets are going to be a redux of PCs,” he said. “Near-term spending is likely to go up as tablets are still a relatively new space. ... Google Android is the new Microsoft Windows, meaning there is still plenty of room for innovation for players like Apple who choose to play in the space their own way.”
In fact, PC makers are emulating Apple’s way, particularly the Cupertino, Calif.-based company’s ecosystem, highlighted by the iTunes, which the company last week said it was expanding into what it calls an iCloud of services for its devices.
At Computex, Wong of Acer talked about a “personal cloud” that would enable users to connect their devices through the Web.
Analyst Tim Bajarin of Creative Strategies Inc. said that hardware innovation is “only one-third of the equation when it comes to a successful tablet program.”
“It needs content and a lot of customized services to become a winner in a crowded market,” he said. “And vendors using Android must innovate in content and services and not rely strictly on a generic Android ecosystem to deliver the products and services customers will want in the future.”
But a key problem for many manufacturers is that Apple has a two-year lead, he said. “And they are not standing still,” he said.
And it will be a big shift for PC makers to make the investment in the cutting edge innovation to catch up with Apple. “It’s not just one invention but a whole portfolio that is needed to make a difference in this industry,” analyst Roger Kay of Endpoint Technologies Associates said. “Apple spends a lot of money on a few areas to keep its edge. Companies that are innovating in the new ‘high mobility’ era include outfits like Qualcomm, which has as much cash as Intel, and HTC, which bet early and heavily on high mobility.”
Some analysts are skeptical. “I am not so sure that Android can eclipse Apple’s position in the next two years and even then, we believe Apple will have at least 50 percent of the tablet market in 2014,” Bajarin said.

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