WITH the iPad 2 now on the market, Apple's competitors are fighting to win some market share. But analysts are already wondering if their tactics, including bundling, will work.
Telstra and Vodafone have come out swinging against the iPad 2, with Vodafone offering exclusivity on the Samsung Galaxy Tab 10.1v, while Telstra is reported to be close to partnering with Motorola's Xoom. Both are slated to come out in the next month.
But analyst Telsyte has argued that consumers will be wary of signing up for long contracts. Telsyte research director Foad Fadaghi said bundled deals might not deliver Apple's rivals a competitive edge.
''I don't think the bundling with a contract for the tablet market is going to work. It hasn't worked for Samsung mainly because people want to know what the upfront costs are,'' Mr Fadaghi said
He said the predecessor to Samsung's Galaxy 10-inch tablet, which was also sold on Vodafone plans, was not a success.
''They [consumers] don't know how much data they are going to consume. They don't want to be locked into long-term contracts, which won't allow them to upgrade. Right now we think this is a pre-paid market,'' he said.
Telsyte has predicted that by the end of this year there will be 1.3 million devices in use in Australia, with an audience of 1.56 million (Telsyte said each device was seen by 1.25 people), rising to 4.7 million devices and an audience of 5.17 million by the end of 2014. Mr Fadaghi said the tablet was clearly emerging as a shared device.
He said Apple and Google Android-powered devices were likely to command a 90 per cent share of tablets, though he said in May he was likely to downgrade Google's share because of some of the problems its operating system for tablets, named Honeycomb, was experiencing in the US.
''They are not there yet and it could be another year before we see significant sales of Android tablets,'' he said. Honeycomb was Google's first operating system designed specifically for tablets and is used in Samsung's new 10-inch tablet.
Telstra's director of devices management, Andrew Volard, said a decision on exclusivity was at least another week away, with Telstra looking at two tablets, one of them the Xoom. But he said Telstra was committed to providing a range of billing options including pre-paid, post-paid and plans. Telstra is offering pre-paid deals for iPad users to allow them to surf the web using its 3G network.
''We're looking at a number of Honeycomb tablets. We're looking at different plans. Different programs and offers will suit different people. We want to provide a range of offers to allow people flexibility. We will continually review what it is we are offering,'' he said.
