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'Bubble burst' may be coming for iPad rivals in late 2011

updated 11:00 am EST, Wed March 9, 2011

Sales forecasts too high, claims analyst

The iPad 2 -- which launches Friday -- presents an "increasing risk of a bubble burst" for competing tablet makers, claims JP Morgan analyst Mark Moskowitz. The companies' sales expectations may be too high, says Moskowitz, and could come back to bite them in the second half of 2011. "In our view, the technical and form factor improvements of the iPad 2 stand to make it tougher for the first generation of competitive offerings to play catch-up, meaning actual shipments could fall well short of plan," the analyst writes.

Based on build plan estimates, it's argued that tablet makers will produce just under 65.1 million units this year. Shipment estimates are expected to range anywhere between 43.1 and 57.5 million however, resulting in excess supply which could vary from 13.2 percent to 51 percent. A baseline JP Morgan scenario calls for 47.9 million in shipments, generating 35.9 percent in excess.

Apple is predicted to maintain dominance, potentially growing sales by almost 100 percent year-over-year to 29 million. The biggest victim in a bubble burst could be component suppliers. "Based on our research inputs, tablet makers eager to emulate Apple's meteoric start are trying to secure components with inflated build plans," Moskowitz notes, suggesting that glass display, processor and "to a lesser extent" NAND flash memory firms could be hurt.

The analyst contents that people holding out for an alternative to the iPad may be "underwhelmed" by rivals. Only the Motorola Xoom and the forthcoming HP TouchPad may have any similar level of attraction.

Moskowitz's price target for Apple stock remains static at $450.


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By Electronista Staff
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Comments

  1. Foe Hammer

    Fresh-Faced Recruit

    Joined: Feb 2005

    +12

    And Then An Innovative iOS Developer ...

    ... will release Bubble Burst as a game for 99 cents. It will, of course, be playable on both generations of the iPad.

    Hope those who have a warehouse full of wannabe tablets right now or who have such on the assembly line are having a great day.

  1. ggirton

    Fresh-Faced Recruit

    Joined: Nov 1999

    +3

    Price matters

    When it comes to affordable luxuries, price matters. And when you buy an iPad rather than another tablet, you still have $$$ left in your pocket.

    I foresee that there will be a remaindered-bubblepop moment (sometime this year, probably) when that is not true, but overstock sales are not profitable for the manufacturer.

  1. testudo

    Forum Regular

    Joined: Aug 2001

    -8

    yeah

    Because only Apple makes new things. All the other companies make one thing and just sit around wondering why it isn't selling.....

  1. iphonerulez

    Fresh-Faced Recruit

    Joined: Nov 2008

    0

    All those unsold Android tablets at the

    end of the year should make those cheapskate Android fanbois very happy. Android tablet vendors will have to reduce prices drastically just to move them from inventory and then those fanbois will be able to get their Honeycomb/Tegra2 tablets for $300 that they're hoping so badly to get their hands on. Motorola has already spent so much money designing the Xoom and they're going to have to eat it when hardly anyone buys the Xoom. Landfills are going to be overflowing with Android tablets unless half of those companies decide to get out of the tablet business early.

    The iPad market looks to be shaping up as the second iPod market. I hope Apple announces some groundbreaking cloud service for iOS 5 that will severely cripple the Android tablet market before it gets started.

    WebOS might fair better with HP's backing and allowing it to run on desktop computers as well.

  1. samirsshah

    Fresh-Faced Recruit

    Joined: Oct 2010

    +3

    Parity with Apple price

    is a kiss of death...

    Any tablet, if she wants to compete with iPad (2), should be priced $400 or lower...

    Xoom's main lacuna, after seeing so many videos, may be her washed out lackluster screen...

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