Eight reasons tablet PCs have missed the mainstream

Computerworld - In 2002, Bill Gates predicted the majority of PCs shipped by now would be tablet PCs, but their numbers are still just a fraction of the market and account for less than 2% of all laptop computers shipped.

While tablet PCs are accepted in increasing numbers by medical personnel, insurance adjusters and other vertical users, why haven't they gone mainstream?

Analysts cite at least eight reasons why tablets haven't done better, including their higher cost compared with standard laptops (up to $300 more), problems with touch technology and handwriting recognition software, and a shortage of suitable applications.

Recognizing those problems, tablet PC makers recently introduced new second- and third-generation devices in both the convertible and slate form factors. More new models are expected later this year running the Vista operating system, which will eliminate the separate Tablet PC Edition in Windows XP and the resulting inefficiencies, analysts said.

"Tablet PCs remain a niche product in the marketplace, used predominantly in vertical applications," said Leslie Fiering, an analyst at Gartner Inc. in a recent conference presentation. The tablet PC's "appeal to horizontal, mainstream users will continue to be minimal" because of higher costs, an "immature" touch interface and other factors, she added.

Fiering, who started following tablet PC trends at their introduction in 2002, makes the strongest condemnations of tablet PCs of five analysts interviewed for this story, but she also offers the greatest optimism.

In an interview, Fiering said she is still "bullish" about what the tablet PC can become. "It's important technology which is slow in coming," she said. "A lot of things have to fall in place, but it's real."

The tablet PC market has tracked fairly closely to Gartner's forecasts, although well behind what Gates was hoping for. Microsoft Corp. predicted sales of 1 million tablets in all of 2003, she said, while Gartner predicted sales of 230,000, about 5,000 higher than actual shipments, she said. That 1 million mark was finally reached in 2006.

Several analysts said they have had to consistently revise their forecasts downward for tablet PCs. About 18 months ago, market research firm IDC forecast 7 million tablets would ship in 2010, and last year revised the number down to 5 million, said IDC analyst Richard Shim. Gartner expects the 5 million mark to be hit in 2009.

IDC puts total tablet PCs at only 2% of all laptops that shipped last year, a number that might exceed 3% this year, Shim said. Other analysts said the amount is less than 2%.

"The forecasts have definitely been reduced since they first came out," Shim said. "A lot of hype has been built ... by Microsoft."