Tablet PC Market Will Remain Partially Successful Until Prices Fall

In-Stat The effort put forth by Microsoft and its hardware partners to introduce the Tablet PC into horizontal and vertical commercial markets, has only been partly successful, according to In-Stat/MDR ( A recent report from the high-tech market research firm reports that the device, which was designed to counteract sluggish commercial PC sales, has been adopted in vertical markets, such as health care, real estate, and insurance. However, horizontal commercial markets have been somewhat hesitant to adopt a new PC form factor in a world of slow-growing IT budgets.
“Many vertical markets were accustomed to pen-based computing, and saw the Tablet PC as giving them the flexibility of pen-based computing plus access to all software that runs on Microsoft’s XP operating system,” says Brian O’Rourke, a Senior Analyst with In-Stat/MDR. “As a result, the vast majority of Tablet PCs that shipped in 2003 went to vertical applications.” Within horizontal markets, Tablet PCs are particularly targeted at large enterprises. But, according to O’Rourke, “With limited IT budgets in the early part of this decade, and forecasts for annual increases in the 3% range over the next four to five years, enterprise IT managers have been hesitant to take a chance on a new PC form factor.” However, In-Stat/MDR projects that as Tablet PC prices come down over the next few years, and Tablet PC software offerings increase, interest in horizontal markets will rise. Horizontal markets should start to make an impact on this market in 2005, as average selling prices fall below $2,000 for the first time.

Even though In-Stat might be correct, the other side of the coin is that TabletPC’s definitely can of grate value, depending on the industry.
Gateway reently announced In the largest higher-education implementation of Tablet PCs in North America, Winona State University, of Winona, Minn., has signed an agreement with Gateway, Inc. to standardize on Gateway(R) M275 convertible tablets for its students, faculty and staff.
The seven-year deal, which includes an initial two-year agreement and five, one-year extensions, will likely exceed $40 million over the length of the contract. Winona State will immediately rollout more than 4,000 Gateway M275 Tablet PCs for incoming freshmen, as well as current students, faculty and staff ready for a refresh of their existing notebooks.
The university, with an enrollment of more than 8,000 students, is the first major higher educational institution to standardize on the Tablet PC platform. Winona State was one of the first “laptop universities” in the nation in 1994. Today, every full-time undergraduate student receives a university-leased notebook, as do faculty and most student services staff. “We conducted an open bid and had faculty, staff and students evaluate many different models of PCs, including other tablets from competing companies,” said Joe Whetstone, vice president of information technology for
Winona State. “The Gateway M275 tablet bubbled to the top. It was the overwhelmingly popular choice of our students and faculty because the convertible has all the features of a mainstream notebook coupled with pen input.”