Android tablets: Success is failure

There's a great deal of interest in tablet devices this year. But is the market big enough to support the manufacturers that want a piece of that market?

By now you're well aware of the events that occurred at CES 2011. Taking center stage this year was the tablet, based on smartphone technology to bridge the gap between smartphone and laptop. Coming up this month is the Mobile World Congress in Barcelona where even more tablet goodness will be introduced.

Previously I discussed tablets that appear to be successful despite the nay-sayers and market analysts that predicted failure. This time I want to take a different approach, and discuss what happens when a platform becomes so successful that it actually turns into a failure.

I know that sounds like an oxymoron: Successful failure. Bear with me, and I'll explain.

Collectively, the Android platform has become more successful than the iPhone and BlackBerry in the smartphone market. Sales of Android phones in 2010 have surpassed all other smartphone manufacturers worldwide. Cellphones are ubiquitous. The market is so large that many manufacturers can compete and make a profit without being shut out. With smartphones, consumers like to have options. Samsung sold over 10 million Galaxy S devices in the past year alone.

Samsung sold over 2 million Galaxy Tabs last year to vendors. Not all of them have been sold to consumers, but Samsung says that sales of the Galaxy Tab are "quite smooth".

It also bears noting that there have been a higher than normal rate on returns of the Galaxy Tab. These returns are typically from customer dissatisfaction; the quality of the device is not in dispute.

The cause of the dissatisfaction is up for debate. Was it due to Froyo (Android 2.2) being used on the tablet instead of waiting for Gingerbread (Android 2.3) or Honeycomb (Android 3.0)? Was it due to people who decided they needed a larger tablet? Was it due to some customers simply not being ready for a tablet at all? Or was it due to some people just testing the waters and then returning the device within the buyer grace period? Maybe some buyers decided to return the device and wait for the next generation of Android tablets like the Motorola Xoom and the T-Mobile LG G-Slate. The iPad returns are around 2%, so this high rate of returns could be a combination of all of these possibilities.

It's my contention that the market for tablets has not yet hit critical mass. It's still in the early adopter phase, regardless of the success of the iPad and the Galaxy Tab. There may simply not be enough consumers to create the demand that the tablet manufacturers and industry analysts are expecting. At CES 2011, over 100 tablets were introduced. I honestly don't see the market demand supporting all of these different tablets. And with so many manufacturers vying for attention, it makes the situation even worse.

In order for tablets to become as common as smartphones and laptops, the paradigm for using them has to change. They need to fill a need. Digital books, games and light web surfing just aren't strong enough reasons to get everyone to buy a tablet. I actually use my Galaxy Tab for a great deal of work. I still use my laptop for writing articles, extensive word processing, spreadsheets and playing MMO games. Tablets need to step up their game in order to be considered as a replacement for laptop usage. They're close, but they're not ready yet.

Update: It looks like the return rate on the Samsung Galaxy Tab may have been much lower than reported by analysts. This would result in much higher customer satisfaction, on par with that of the iPad.