Tablet computers have been around for decades. One of the earliest models was the IBM ThinkPad 750P that was introduced in 1993. According to IBM, this convertible pen notebook would "let you capture your thoughts and ideas so you could spend more time thinking and less time typing." Although a great idea, these early tablets did not sell very well for several reasons. The handwriting recognition technology wasn't good enough (yet), the hardware was underpowered, there was no wireless, the applications and OS were primitive, and the price premium over equivalent notebooks was too high. Over the next 17 years a variety of vendors introduced numerous tablet computers, none of which were very successful. Microsoft's Tablet PC introduced in 1999 did find some success in the business market in select vertical applications (such as data capture devices for people who work away from a desk). All of this changed in 2010 when Apple introduced the first iPad.
The first iPad was a revolutionary product that forever changed tablet computing, as well as notebook and PC computing. Analysts predict that the tablet market may grow as big as 60 million units in 2013. On March 2, 2011 Apple announced that it sold 15 million iPads in three fiscal quarters of 2010. Over the past 18 or so months, virtually every major hardware manufacturer (as well as many second tier brands) have introduced tablets in an effort to compete with the iPad and gain a share of this huge market. Some of these manufacturers include Acer, Asus, Fujitsu, HP, Lenovo, Motorola, Research in Motion, Samsung, Sony, Toshiba, Viewsonic, and Vizio. Most of these tablets run the Android operating system. Two notable exceptions include Research in Motion's BlackBerry Playbook that runs the Blackberry Tablet OS and HP's TouchPad that runs WebOS (originally from Palm). Interestingly enough, these two tablets have have been complete duds. HP no longer sells the TouchPad and RIM has cut the price of the Playbook by 25% (50% for employees) in an effort to kick-start sales of a device that fell 70% under forecast.
According to IDC, in the second quarter of 2011 the Apple iOS earned 68.3% of the tablet market while Google's Android OS earned the majority of the rest. Consumers have many choices when buying tablets today. Why then do some tablets succeed while others fail? How is Apple able to hold onto such a dominant share of the tablet market? To answer these questions, you have to understand the factors that drive preference for one product over another. Fortunately, there is a market research technique that excels at answering this exact question. I am referring to conjoint research.
Conjoint analysis is a term that is loosely used to describe a number of different market research techniques, all of which are designed to estimate the trade-offs customers make when comparing different products for purchase. Some of the variations of conjoint analysis include full profile conjoint, discrete choice conjoint, choice modeling, and adaptive conjoint. The output from a "conjoint" study is a market model that, when done correctly, enables the researcher to accurately predict preference share for one product over another. I would not be surprised if the latest entrant into the tablet market, Amazon, conducted a conjoint study to aid in the design of the Amazon Kindle fire. The Kindle fire, priced at $199, will be a formidable competitor to the iPad. Amazon received 95,000 pre-orders for the tablet the first day it was made publicly available. The battle between the iPad and Kindle fire is a classic demonstration of the trade-offs customers make. The two tablets differ not only in price, but in many features.
In my next post I will present a simple design of a conjoint study and explain how it could predict the iPad's dominant share as well as market reaction to the TouchPad and Kindle fire.