'Pure' PC makers reportedly fleeing the tablet market

November 18, 2011: 6:25 AM ET

Likely to leave the field to Apple, Amazon and Barnes & Noble, according to DigiTimes

Source: Company reports

Taipei-based DigiTimes, which has been churning out rumors from Asian electronics parts suppliers as fast as its correspondents can type, reported Thursday that unnamed "sources from upstream supply chain" believe that PC makers such as Hewlett-Packard (HPC), Dell (DELL), Acer and Asustek will "gradually phase out" of the tablet market.

According to DigiTimes:

With Amazon offering its Kindle Fire at US$199 and Barnes & Noble to provide its upcoming Nook Simple Touch at a price of US$99, the pure hardware players are unlikely to profit from the market through price competition.

Since Amazon and Barnes & Noble are mainly profiting from their content platforms, not the hardware, the sources believe these hardware devices will eventually be offered for free.

This part of the DigiTimes' report makes sense. The last part, not so much:

The sources pointed out that although iPad 2 is also seeing strong demand from consumers, sales were lower than those of iPad, indicating that consumers' strong enthusiasm for tablet PCs has already disappeared.

As the chart above shows, once Apple (AAPL) got production ramped up after the iPad 2's release at the end of fiscal Q2 2011, its sales quickly eclipsed those for the original iPad.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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