"That tablet thing? Yeah, we'll get back to you on that." That's a crude but fairly accurate encapsulation of the attitude Microsoft, Intel, and Advanced Micro Devices have toward the iPad and the tablet market in general.
Why the cavalier attitude? Before I defer to the opinion of an IDC analyst I interviewed (below), here's one pretty obvious reason I'll put forward. All three companies look at their revenue streams--traditional PC hardware and software on laptops, desktops, and servers--and come to the conclusion that the tablet is a marginal market. A deceptively accurate conclusion, because at this point in time--and even 12 months out--the tablet is marginal compared with the gargantuan laptop, desktop, and server markets.
And listening to both Intel's and AMD's earnings conference calls this week, it's clear that relative nonchalance is the prevailing attitude. While Intel's CEO did address the iPad directly, he later opined that the tablet "numbers...are relatively small in the grand scheme of the ship rate of the PC, notebook, and Netbook businesses." A variation on a theme he's stated during past conference calls. And AMD's CEO went so far to say that the tablet doesn't even warrant R&D spending yet.
At the other extreme is Apple's earnings statement (which, I submit, is as good a crystal ball as you'll get for future market trends), showing a brave new world that is moving to tablets in a significant way. According to figures cited by Apple in its third-quarter earnings, 3.27 million iPads were sold versus 3.47 million Macs. And that happened, mind you, in a matter of months. And iPad revenue? From zero in the first quarter to $2.17 billion by the third quarter.
So, am I being too harsh--or too simplistic--in judging Microsoft, Intel, and AMD by saying, it's the tablet, stupid? On Friday, I asked Bob O'Donnell, a program vice president and analyst at IDC, about the seeming failure of the PC camp to fully grasp the significance of the tablet. His response, more than anything, tries to put the Microsoft-and-Intel-just-don't-get-it argument in perspective.
First some raw numbers. IDC expects Apple to sell about 15 million iPads this year. All media tablets (including other brands) will be about one-tenth of projected notebook shipments, which are forecast at… Read more