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Cisco Tablet: Not an iPad Killer

Cisco's move into the tablet market is unlikely to cause sleepless nights over at Apple, where the iPad is enjoying healthy demand.

SAN JOSE, Calif. (

TheStreet

) --

Cisco's

(CSCO) - Get Report

move into the tablet market

is unlikely to cause any sleepless nights over at

Apple

(AAPL) - Get Report

-- the

iPad

is enjoying healthy demand.

Cisco unveiled its

Google

(GOOG) - Get Report

Android-based Cius device on Tuesday, which is aimed at business users. With Apple's iPad shipments recently hitting the 3 million mark, there is a massive appetite for large touchscreen tablet devices, a product trend that Cisco clearly wants to tap.

"Clearly, Cisco has observed Apple's massive success in the mobile markets and, in our view, is trying to replicate some of that growth tailored towards its business customers," wrote Brian Marshall, an analyst at Gleacher & Company, in a note released on Wednesday. "

But we do not view the Cius and the iPad as competitive products."

Whereas the Cius focuses on enterprise features such as telepresence -- a form of high-end videoconferencing -- and specialized business collaboration software, the iPad is aimed primarily at consumers. Plenty of iPads have made their way into the workplace, but Apple's tablet functions more as an e-reader and gaming platform than as a business tool.

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The iPad has certainly breathed new life into tablets, which had previously struggled to make their presence felt against laptops and netbooks. With e-reader rivals

Amazon

(AMZN) - Get Report

and

Barnes & Noble

(BKS) - Get Report

locked in a price war,

the iPad has gone from strength to strength, carving out a new technology niche somewhere between smartphones and laptops.

Not anticipating any major iPad challenge from Cisco's new Cius device, Gleacher & Company's Marshall reiterated his forecast that Apple will ship 20 million iPads in 2011. This, he added, represents 67% year-over-growth and approximately 15% of Apple's total revenue.

It could also be some time before businesses actually get their hands on the Cius. Customer trials of the tablet will begin in the third quarter of this year, with general availability in the first quarter of next year.

Marshall expects Cisco to tighten its relationship with virtualization specialist

VMware

(VMW) - Get Report

around the Cius. "Our initial belief is that Cius's VDI (virtual desktop interface) will be based on VMware's View

product," he wrote. "The upcoming refresh of View is likely to offer offline (or "local") VDI support which would come in handy for mobile devices such as the Cius when a network isn't readily available."

Cisco shares were down 3 cents, or 0.14%, to $21.59 on Wednesday, despite a modest rally in tech stocks that saw the Nasdaq gain 0.35%. Apple shares also dipped slightly, falling 17 cents, or 0.07%, to $255.98.

-- Reported by James Rogers in New York

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