A year after they charged into the annual Consumer Electronics Show with more than 100 devices, tablet makers are returning to Las Vegas next week as a ragged and battle-scarred army that has failed to dent the success of Apple's iPad.
Despite the deep war wounds â€“ most notably HP's abandonment of its TouchPad and Research in Motion's $485m writedown as it was forced to discount deeply its PlayBook device "the iPad rivals are banking on a new Android operating system, the arrival of Windows 8 and improved content offerings to help them cut into Apple's two-thirds share of the market.
They should be helped by consumers' enduring appetite for tablets as overall market growth continues, according to NPD DisplaySearch forecasts. The research firm this week estimated 250 per cent growth year on year in 2011 to 73m units, as notebook PC shipments grew 12 per cent to 187.5m units.
While companies such as Samsung, Sony and Toshiba have adopted Google's Android operating system, it has not repeated its success in smartphones, where it had more than a 50 per cent share in the third quarter, according to Gartner research.
Unlike smartphones, tablets do not generally attract subsidies from carriers and consumers seem unwilling to pay more than $250 for a non-iPad tablet, according to a survey by the consumer electronics site Retrevo last month. This has made life hard for Android hardware manufacturers wanting to pitch their devices at the $500 level of the iPad, says Andrew Eisner, Retrevo content director.
"While Apple can command a premium price for the iPad with its apps and content, the likes of Samsung and Toshiba are only able to sell the hardware "they don't make any money from sales in the Android Market â€“ so they are stuck with trying to make money by charging a higher price for the hardware," he says.
Makers of ereaders, specifically the retailers Amazon and Barnes & Noble, have squeezed the established manufacturers with tablet versions under $250, made possible by their own ability to sell content and services such as books and film-streaming. These have been relatively successful, with Amazon's Fire tablet leading Kindle sales of more than 1m a week in December.
Rhoda Alexander, senior manager of tablet research at the IHS iSuppli research firm, says that while the Kindle Fire's hardware may be basic, Amazon's ability to sell content and an "experience" has been key.
"You can make the most beautiful device that you want but, if when you turn it on, it's not something that opens your eyes to a whole other world of content and different way of doing things, the beauty of the device is somewhat lost at that point," she says.
Jen-Hsun Huang, chief executive of Nvidia, whose Tegra chips have powered leading Android tablet models, says their progress has also been dogged by the immaturity of the operating system and a lack of apps "the release in 2011 of an Android 3.0 version, codenamed Honeycomb, specifically designed for tablets, did not get the developer support it needed. "It was such a different operating system, it split the Android platform into phones and tablets. There was a small installed base of Honeycomb tablets and, as a result, there weren't that many applications developed for it," he says.
That should change this year with 4.0 or "Ice Cream Sandwich" â€“ a unified operating system that first appeared on the Samsung Galaxy Nexus smartphone in November. Android developers will now be encouraged to develop for both smartphones and tablets at the same time, Mr Huang forecasts.
Microsoft's Windows 8, expected to launch in the second half, should also aid tablet developers with its touch-optimised "Metro" interface offered as an alternative to the traditional Windows desktop.
"[Android tablets] have been an incremental business for us, they've been very solid and steady," says Philip Osako, a Toshiba product marketing director. "But we're very excited about Windows 8 and we think it will grow the market for tablets in 2012."
Although tablet makers can look forward to better touch interfaces and more compelling apps â€“ as well as more comprehensive content offerings in the case of new entrants such as Sony "they still face stiffening competition from Apple and will have to fight to be the focus at next week's key event for the industry.
An iPad 3 is expected by the spring and Ultrabooks â€“ thin instant-on laptops â€“ are slated to be the story of this year's Consumer Electronics Show. More News From Financial Times