iPad challengers: Disappointment, dismay and disaster
By Verne Kopytoff, contributor
FORTUNE — Apple makes selling iPads look easy. All it takes, it seems, is holding a press conference, buying splashy ads and ensuring there are enough devices in stock to meet the incredible demand. No wonder that a long list of companies have tried challenge Apple by creating their own tablets.
The latest to do so is Microsoft (MSFT), which unveiled its tablet, called Surface, on Monday. But history shows that Microsoft is taking a big risk. Most companies that have tried to take on Apple’s (AAPL) iPad have failed spectacularly or made only limited inroads. Apple accounted for 63.1% of all tablets shipped in the first quarter, according to IDC, a market research firm. The closest competitor, Samsung, came in at a distant 8.6% followed by Amazon (AMZN) at 3.9%.
Microsoft is hoping that its tablet is differentiated enough from the iPad to make it a credible competitor. The Surface comes with a stand to hold it upright on a table and a keyboard integrated into its carrying case. The tablet’s exact price and release date were not disclosed.
Of course, Steve Ballmer, Microsoft’s chief executive, gave an effusive endorsement of his new tablet when he showed it off onstage in Los Angeles. Whether consumers will agree when they get their hands on it is another matter. Here’s a recap of how some of iPad’s other challengers have fared:
Research in Motion (RIM)
With sales of its flagship BlackBerry phones shrinking, RIM bet big on the PlayBook tablet last year. The device was supposed to be well-received by corporate IT departments, where RIM had sizeable contacts. It quickly became clear, however, that those IT departments preferred iPads. RIM took a nearly $500 million write down in December for unsold inventory and then, earlier this month, discontinued the cheapest version of the tablet.
H.P.’s push into tablets last year turned out to be one of the biggest blunders in Silicon Valley history. Just a month and a half after introducing the TouchPad tablet, H.P.’s chief executive at the time, Leo Apotheker, said he would stop production. Consumers showed little interest in the device, which ran on the innovative but flawed WebOS operating system. Apotheker, who had once called the TouchPad a serious challenger to the iPad, would soon lose his job. Meg Whitman, his replacement, intends to redeem H.P. with a new tablet this fall that uses Microsoft’s Windows 8 operating system.
Amazon’s Kindle Fire, which premiered last year, has a number of things going for it. Most notable is its parentage — Amazon is the biggest online retailer — and the decision to price tablet as a loss leader for selling e-books. Amazon’s knack for marketing is helping its cause. Prime members who buy a Kindle Fire can stream movies through Amazon for free, for example.
The Galaxy Tab is the iPad’s closest challenger, albeit a distant one. It shipped 1.6 million tablets in the first quarter versus 11.8 million for Apple, according to IDC. The Galaxy Tab has received relatively good reviews and is considered a credible alternative to the iPad. Not surprisingly, Apple is on the attack via a copyright infringement suit against Samsung that is winding its way through court.
Like most of its fellow computer hardware companies, Dell has had a troubled relationship with tablets. It came out with the Streak 5, a mini tablet, and then the Streak 7, a larger version. But they got little traction and were discontinued. Dell plans another consumer tablet that runs on Windows 8.
Unlike the other tech companies, Cisco focused its tablet, Cius, on the enterprise market. The thinking was that Cisco has a long history with business users and an existing relationship with many IT departments. That theory did not pan out, however. Cisco, as part of a larger reorganization that is focusing the company on its core products, pulled the plug on the Cius last month.