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Could Compaq re-emerge to fly the tablet flag for HP

Tablets, it seems are going to be bigger than anyone thought at first. Bigger than PCs? Possibly


Published: 25 August, 2011

READ MORE: Financial | Laptop | Netbook | Tablet

Tablets, it seems are going to be bigger than anyone thought at first. Actually they are going to be bigger than anyone thought at second take too. Bigger than PCs? Possibly.

But Apple has created a $6 billion a quarter business out of tablets already and they are in their infancy and despite losing their founder this week, the company is worth about $348 billion. By comparison, HP which has a $40 billion PC business, so almost $10 billion a quarter, larger than Apple's iPad business, which is well understood and tightly integrated into the working world, is almost certainly going to be unable to find a buyer.

This is partly because there is nobody quite big enough to take on a $40 billion problem, and partly because PCs are largely unloved. They are already well defined, and embedded into our working and home infrastructure. No-one can imagine doing without one, and most people don't yet have a tablet, but few put a PC on their Christmas list and everyone puts an iPad on it.

We reckon that HP will be unable to sell of its PC business and will conclude that it should "give" it away to its shareholders, a bit like Viacom gave away both CBS and Blockbuster and Time Warner gave away Time Warner Cable. As a separate entity, let's call it Compaq, it may develop some of the zest and enthusiasm to make a company good enough to at least put out a decent tablet, and make the leap from PCs to tablets.

For a full version of our assessment of HP's PC plans, email and ask for a copy of our Faultline issue for this week.

decided to change their plans to respond to the first iPad. iSuppli has this week finally realized that these projections now need to be quarterly as the world tries to understand the tablet phenomena and compete, succeeds, or partially succeeds or fails, and Apple responds - and tablets continue to loom larger and larger in all our lives.

Our own area at Faultline, that of video delivery and consumption patterns, is becoming radically influenced by the mere existence of the iPad and all its attendant copiers.

As Apple's rivals stumble, Apple is set to increase its iPad shipments faster than previously expected, said iSuppli retaining 74% of the market during 2011 and Apple will still have as much as 43% market share by 2015. But it is the size of the market, almost bigger than the PC market that shows the way the wind is blowing.

Global media tablet shipments will be 60 million units in 2011, up from 17.4 million in 2010 and this will go to 275.3 million units by 2015 this new iSuppli adjustment says. They are just figures and like all figures offered by analysts, ourselves included, are subject to change when the wind changes direction.

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