After a year, tablet still niche

Computerworld - A year after its introduction, Microsoft Corp.'s Tablet PC technology remains a niche product, according to analysts and hardware vendors. But the company hopes user adoption rates will rise when an upgrade of the pen-based operating system hits the market.
The updated software, formally known as Windows XP Tablet PC Edition 2004, is due to ship by the end of June. Bill Gates, Microsoft's chairman and chief software architect, said in his Comdex/Fall 2003 keynote speech that the upgrade should make it easier for developers to add so-called digital ink capabilities to new and existing applications.
Some corporate users are already making big investments in tablet devices. For example, HealthSouth Corp., a Birmingham, Ala.-based company that provides outpatient surgery and other health care services, this month said it had ordered 5,000 tablet PCs equipped with wireless LAN connections from Motion Computing Inc.
HealthSouth CIO Randy Carpenter last week said the tablet devices will be used by physical therapists at the company's 1,400 physical rehabilitation centers. The application software running on the systems will give therapists access to patient records and let them document clinical progress, Carpenter said, adding that the wireless links will enable the therapists to be "completely mobile and at the patient's side."
However, tablet PC sales aren't a big business yet. First-year shipments of tablet hardware totaled about 420,000 units, according to Framingham, Mass.-based market research firm IDC. That's just a blip compared with sales of handheld computers, which amount to more on a monthly basis than the yearly figure for tablet PCs, said IDC analyst Alex Slawsby.
Scott Eckert, CEO of Austin-based Motion Computing, said that persuading IT managers to buy a relatively unproven technology such as tablet PCs requires a lot of time and effort by hardware vendors. Sales prospects are spending up to six months evaluating the devices, Eckert said.
Another factor working against tablet PCs is a price premium of about $150 over notebook PCs, said Sam Bhavnani, an analyst at ARS Inc. in La Jolla, Calif. That quickly adds up to "real money" for companies that want to buy thousands of devices, he noted. Current prices listed by key tablet PC vendors range from $1,699 to $2,739 per unit.
Microsoft officials remain confident that tablet PCs will become mass-market products, said Susan Cameron, the company's group product manager for the technology.
The operating system upgrade will make it easier for users to input text and annotate PowerPoint slides, she said. It will also provide "context sensitivity" capabilities for translating written words into