The Impact of the Tablet PC

By Mark Fihn, Vice President, DisplaySearch

For those readers who have not been exposed to the massive media coverage of the November 7 release of Microsoft’s Windows XP for Tablet PC and the associated product releases from numerous PC brands, welcome back from your dogsled trip to the North Pole.  The media attention associated with the launch of the new OS release, designed specially for tablet PCs, has been amazing, on a global basis, with participation from a broad range of hardware and software supporters.  And the coverage has been extremely broad – even hitting Jay Leno’s monologue on The Tonight Show.

We at DisplaySearch remain very upbeat about the impact that tablet PCs are likely to have on the display industry.  We believe that tablet-style computing will help make the display an even more important component in computing.  Today, the display is the primary output device between the computer and the human user.  Tablet computing is likely to make the display the primary input device as well.

One of the obvious advantages of pen-input computing is that users are no longer divorcing pointing actions from cursor movement – computing images take place right under your stylus.  The typical mouse/screen relationship, although we’ve become accustomed to it, is not really very efficient in terms of basic eye/hand coordination.  Having the action tightly linked to the stylus enhances many computer functions, such as drawing or photo editing.  And of course, handwriting is virtually impossible when using a mouse.

We have been publishing columns about tablet-style devices for two years now, and to commemorate the November 7 release, we are offering a special reprint of all of these articles, comprising 127 pages of news coverage and editorial comment about tablet PCs, WebPADs, eBooks, and other tablet-style devices.  The document provides a detailed review of the tablet-style industry over the past two years, summarizing more than 250 different devices introduced in the product class.  The DisplaySearch Monitor Reprints: Tablet PC is now available for $295 from InfoCater.

According to a Business Week article, Microsoft spent $400 million developing the Tablet PC operating system to incorporate its handwriting-recognition and digital inking tools.  Microsoft is now spending another $70 million to market the machine.  Many media analysts seem to suggest that this investment will be a colossal failure on Microsoft’s part, (not to mention a broad array of hardware and software partners), but I suspect that even if the Tablet PC is slow to gain popularity, Microsoft will be able to reap gains from its Tablet PC investment in several ways:

·  Numerous touch-screen applications exist, regardless of the success of the Tablet PC.  Providing OS support for such applications is a significant niche.  Certainly we can expect future versions of the Pocket PC OS to contain portions of the lessons learned from the Tablet PC.
·  High-resolution displays are currently not adequately supported by Windows.  The new Tablet PC edition, however, claims optimized support at pixel densities from 120 to 150 ppi.  We can expect to see future operating systems supporting higher pixel densities, based on the developments associated with the Tablet PC edition.
·  Even if the pessimistic analysts are right and the Tablet PC is slow to take off, the allure of digital inking will eventually prove to be popular.  Continuous improvements in digital inking and handwriting recognition will serve to benefit Microsoft’s Tablet PC efforts for many years into the future.

One of the few criticisms that I’ve heard about the Tablet PC edition that actually made sense to me was the claim that the digital inking function is only meaningful for other users with the XP for Tablet PC Operating System.  It turns out that this claim is not exactly true.  At least for Word, Outlook, Acrobat, and PowerPoint applications, I received, opened, and viewed files without any problems.  Even when files are annotated in Journal, I can see the Journal file without problem, but in that case I cannot do anything with it in its native application.  Microsoft is developing a Windows Journal Viewer for Windows XP and Windows 2000 that will further enable viewability of annotated files by non-tablet PC users.  

Perhaps the criticism about tablet PCs that I find most offensive is one that has appeared numerous times in the popular media.  The argument suggests that because pen-input devices failed in the past, that they will fail again this time.  I find this offensive for two reasons.  

First, I think it’s rare that things are done perfectly the first time.  Only by trial-and-error experimentation can new devices be improved to the point of “success”.  One can easily point to Apple’s Newton as a failed product, as many analysts have done in the past when writing about tablet PCs, but perhaps it’s more sensible to say that the Apple Newton successfully introduced the PDA concept to the world, and that if any “failure” exists in relation to the Newton, it’s Apple’s failure to continue pursuing the product through until its eventual commercial success.  While it’s true that GriD, Agilis, Go Corp, Eo, General Magic, Momenta, and others failed to create successful businesses with pen-input based devices, there are also many companies that do have successful pen-based efforts.  A quick read through the DisplaySearch reprint articles about tablet PCs and WebPADs will surprise many simply by the number of tablet-style devices that are currently in the market.  

Second, I think the examples of IBM’s TransNote and Sony’s Slimtop as failed products in this category ignores the fact that these were novel devices created almost exclusively by the companies in hopes of finding some high-margin niche.  Such niche market experiments rarely transform into mainstream market successes.  The tablet PC effort, however, is a broad industry-wide effort to bring the tablet-style form factor to the mainstream. 
  
In all the buzz I have read about tablet PCs in the past days, one of the most interesting explanations I saw about why tablet PCs would fail is that “Microsoft's new product is too similar to existing notebook computers to be successful.”  I think there is considerable confusion on this topic.  Tablet PCs are not a new category of computing device – they are simply a subset of notebook PCs.  Just think of portable PCs – some in a tablet-style, some in a clamshell-style, and some that are convertible between the two styles.  

Many express concern about adequate application software support for the Tablet PC Edition.  In addition to Microsoft’s own efforts, here is at least a partial listing of application providers: Adobe Systems Inc., Agilix Labs Inc., Alias|Wavefront, Allscripts Healthcare Solutions Inc., Autodesk Inc., Avanade Inc., BAE SYSTEMS, Corel Corp., Dassault Systemes, ESRI, FranklinCovey, Groove Networks Inc., Hanwang Technologies Inc., iSoft Corp., Iteration Software Inc., Keylogix International Ltd., Leszynski Group Inc., SAP AG, ScanSoft Inc., Siebel Systems Inc., Stentor Inc., WebEx Communications Inc.,and Zinio Systems Inc.
Six major magazine publishers plan to don a new image for tablet PCs, creating digital versions of their periodicals.  Microsoft is working with Forbes, the Financial Times, the New Yorker, Slate and two foreign economic magazines, France's Les Echoes and Germany's Wirtschafts Woche, to build tools for publishing a trial set of electronic magazines that will be available for download sometime in 2003.  The publishers are viewing the opportunity as a means to innovate and appeal to advertisers in a new way.  Microsoft-owned Slate, for example, announced that Volvo would be a major sponsor for the first six months of its trial, spending in the six-figure range, according to its publisher.  Others say that advertisers are excited about the coming technology because it combines the familiar   magazine-style print ads   with the interactivity of the Web.  Microsoft demonstrated the device Thursday by presenting a digital edition of the New Yorker that showed an ad for the Audi on page two.  Carey said that Audi could restructure its print advertisement for the page and show a 30-second commercial or link to specific Web pages if readers asked for more information.  The New Yorker plans to produce a near-rendition of its magazine for trial, with the same layout, articles, cartoons and spot art as the print edition, available weekly.  Pricing has yet to be determined, Carey said.
 
Of the first tier notebook PC brands, there are several noticeable absences, including Dell Computer, IBM, Sony, Apple, Gateway, and Sharp.  Executives at Dell Computer, who have been particularly vocal in their opinion that the tablet PC was “a technology looking for customer,” have recently changed their comments slightly, suggesting that the company has not ruled out participation in the market.  Dell is selling tablet PCs for ViewSonic Corp. and Motion Computing through its peripherals group.  When tablet PCs have matured into a stable market, Dell will launch its own version, said Tony Bonadero, Dell's director of marketing for Latitude notebook PCs, in Austin, Texas, “it's not a question of 'if' tablet PCs will become a product line, but when."
 
Mark Fihn is Vice President of DisplaySearch, publisher of the bi-weekly Display Search Monitor.
For more information about DisplaySearch please visit http://www.displaysearch.com/.
 
Founded in 1996, DisplaySearch is the worldwide leader in flat panel display market research and consulting. Because DisplaySearch surveys the whole display food chain – component suppliers,
equipment suppliers, panel suppliers, OEMs, brands, distributors and retailers – it has a unique and highly sought-after viewpoint attracting a growing number of customers. It provides the industry's most valuable market forecasts, technology assessments, surveys, conferences, studies and analyses and has acquired, in just six years, a customer base of more than 500 companies in 20 countries.