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Business Tablets Create Upside Market Opportunity

The success of media tablets is raising questions about the e-reader market sustainability. E-readers still offer the best reading experience and appeal most to avid book readers, but a broader group of people prefer additional multimedia functionality -- such as web browsing, video and gaming.

Media tablets are optimized to deliver a multifunction experience, and therefore, represent a stronger opportunity for consumer electronics (CE) manufacturers. As a result, In-Stat is forecasting that tablet shipments will outpace e-reader shipments by the end of 2011.

"Of the two, the tablet market is the stronger and more sustainable opportunity," says Stephanie Ethier, Senior Analyst at In-Stat. In fact, e-reader manufacturers will likely begin adding tablet-like features to some devices in their product line.

Barnes & Noble already offers the Color Nook, which is often compared to a tablet, and Amazon, the leader in the e-reader space with its Kindle, will likely launch a tablet device later this year in an effort to compete head-to-head with the Apple iPad.

The other latest development is the emergence of business-oriented media tablets that are targeted at supporting new unified communication and collaboration apps -- this is the next upside market opportunity.

In-Stat's latest market study findings include:

- Of the 1,000 U.S. respondents to an end-user survey, 38 percenet own a tablet as compared to the 26 percent who own an e-reader.

- Fueled by low prices and continued expansion of e-book content, global e-reader shipments will reach 40 million by 2015, but tablet shipments will eventually outpace e-reader shipments.

- The total semiconductor opportunity for tablet suppliers will reach $13.8 billion in 2015.

- The total semiconductor opportunity for e-reader suppliers will reach $1.6 billion in 2015.

- Over 60 percent of future tablet purchasers plan to buy a tablet equipped with both Wi-Fi and 3G connectivity.

- By 2015, 15% of all tablet shipments will go into business markets.

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