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Tablet Mania Running Wild

On the eve of the annual Consumer Electronics Show in Las Vegas, tablet mania is hitting a fever pitch. We may see dozens of tablets launched this week alone, many from the biggest brands in computing such as Lenovo, HTC and Asus. The presumed Apple (AAPL - Get Report) version in particular allegedly is going to become the new iPhone, changing our lives forever like a Messiah. The lines will go around the blocks. It feels like real estate pre-construction mania all over again.

(See all our CES 2010 coverage.)

Before we swallow the new tablet religion lock, stock and barrel, however, let's ask some basic questions:
  • What will it do that the current smartphones and laptops don't do?
  • Where will it be used?
  • Who will afford it?

Apple's Precious Tablet

What will it do that's new? Most people who are the intended purchasers of a new tablet are allegedly already owners of an iPhone, Research In Motion's (RIMM) BlackBerry or whatever, plus a laptop. We can read the news on smartphones and laptops alike -- either by going to the Web sites or by using an RSS reader such as Viigo. If we want to read a book, Amazon (AMZN - Get Report), Barnes & Noble (BKS - Get Report) and Sony (SNE) already have the electronic book readers. It's far from clear what the functionality will be requiring a tablet.

Where will you use this tablet? At home, the laptop is easily portable and fully functional, traversing work as well as play. The screen is bigger, a keyboard is handy, and software compatibility is universal. When you walk out the door, the tablet is too big for the pocket, and will you really want to add it as an extra weight in your laptop briefcase?

Who will afford it? Most people are replacing their smartphones every two years, and laptops every three years. The smartphone may be $200 upfront plus $100 to $150 a month. The laptop may be $1,500 upfront (including a three-year warranty and Microsoft Office) and as much as $60 a month for a cellular data connection. Families in turn have multiple existing replacement cycles, not only for the adults, but increasingly also for the children -- unlike only a decade or two ago. Will these families want to enter the treadmill of a third replacement cycle -- $500 or more for the device, plus perhaps a monthly subscription fee? Or will they want to focus on being able to afford upgrading their smartphones and laptops instead?
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