System Builders Assess Intel's Impact On Tablet Market

The success of Apple's iPad and the coming wave of Android and Windows tablets have solution providers scrambling to figure out where the business opportunities lie for the channel.

With Apple's iPad selling more than 3 million units in its first three months, and with some analysts predicting that Android-based tablets will eventually replace iPad as the leader in tablet sales, OEMs are scrambling for a share in the new market, and chipmaker Intel is getting involved early.

Intel's entry into the market seemed inevitable once it acquired the wireless unit of Infineon in August, which makes the chips inside Apple's iPhone. With Intel poised to offer chips for tabletsfrom HP, Dell and a number of smaller OEMs, solution providers are wondering what impact this will have on the tablet market.

"This will definitely drive the price of tablet PCs down, no doubt about it," said one solution provider, who requested anonymity. "Intel could give customers different flavors of tablets to choose from, and it could also bring better features to the new tablet PCs."

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The tablet market is at an early stage and Intel will target weaknesses in competing products, said the source.

NEXT: How Substantial Is The Tablet Phenomenon?

"Some of the tablets currently out there have some deficiencies," the source said. "Intel will look at the products out there and find the one that best fits their strategy and overcome those deficiencies, and they have the size and market share to do that."

Computer Technology Link, a Portland, Ore.-based Intel partner, is preparing to launch its own tablet offering equipped with an Intel Atom N450 processor later this month. The SL10 2goPad includes features aimed at the business space, including 2 GB of DDR2 memory along with WiFi, Bluetooth, and 2 USB ports. It also comes with Flash support, a built-in e-reader, and a 1.3 megapixel webcam.

Though tablets are clearly gaining momentum, it's important to remember that the product category failed to gain a market a decade ago. Apple's iPad has rekindled interest in the category, but some solution providers see the coming wave of competing tablets as another example of companies chasing Apple.

"I’ve been hearing how tablets are going to be the future for about a decade so this seems to be nothing more than another knee-jerk reaction to Apple’s success -- and Apple lives in their own world," said Daniel Duffy, CEO of Valley Network Solutions, a Fresno, Calif.-based solution provider. "I'd really like to see Intel and Microsoft start playing their own game, and then marketing it more effectively instead of continually chasing the innovators."

There's reason to believe that the current interest in tablets is more than a temporary phenomenon, and some industry analysts are predicting tablets are on their way to replacing consumers' secondary PCs. More powerful than smartphones, more portable than PCs, the tablet category which Apple revived could be on the verge of changing the entire PC industry, according to a September report from analyst firm Technology Business Research (TBR).

NEXT: Opportunities For The Channel

As is usually the case with new technologies, one of the key roles for the channel will be in guiding customers to tablets that best fit their business needs.

"Our true opportunity lies in having the knowledge to help our clients identify these trends and to show them how to leverage the advantage of being ahead of the curve," said David Doyle, vice-president of Simply Computing, a Vancouver-based Apple reseller. "A simple example is just being able to explain to someone if they should be getting a 3G or Wifi only device. Retail and business consumers are constantly challenged with such simple yet crucial decisions whenever technology shifts."

"Though still viewed by many as a neat toy, the iPad is helping to drive the consumption of media content while on the go, not to mention the ability to fully interact with Windows systems via a mobile client running on iOS," said Doyle.

Apple doesn't permit its U.S. resellers to sell the iPhone, but Doyle believes the iPad's presence in the market will push the creation of content for consumption on mobile devices. As mobile embedded devices come to represent a greater share of overall PC sales, it's likely that companies in turn will invest more in mobile technology.

NEXT: Context-Aware Devices

Case in point: At the 2010 Intel Developer Forum last month, Intel CEO Justin Rattner discussed the future of mobile devices at length. Rattner said Intel is working on a number of