Will Tablets Be Bigger Than Consoles?

If you believe the Gartner Group's analysts, the overall tablet market is going to grow at an amazing rate -- and it will become bigger than any game console by 2012. Yes, the prices for games are less... but note that iPad games tend to have a higher price than iPhone games (all of $4 or $5 instead of $2 or $3). Still, when you're looking at a total market of 175 million or so by the end of 2012, it should be enough to convince you to enter that market.

The chart from Forester Research, above, shows tablets gaining a quarter of the US market in a few years for all computing devices... that's out of 500 million or so sold. Makes you wonder why other companies are taking so long to challenge the iPad.... but it may be tougher than it looks. Android is not yet tablet-ready, according to Google. And Apple has a number of custom chips, and patents, that may be hard to work around. Still, the lure of the market size will get competitors to figure out ways around these barriers.

Here's what Gartner predicts for tablet sales (iPad and Android and whatever else, though iPad will probably get the biggest share):

	2010 Sales	2011 Sales	2012 Sales	2013 Sales
Media Tablets	19,490	54,781	103,425	154,150

(numbers are in thousands)

Add those up and you can see that by 2012 tablets will be a larger market than any console; the iPad by itself will probably be among the biggest consoles ever. (Expect Apple to sell about 24 million next year, on top of the 16 million or so this year... it'll be comparable to the Xbox 360 base, bigger than the PS3. Note that the iPad is only one of the iOS devices... which currently total about 125 million worldwide installed base.)

"The all-in-one nature of media tablets will result in the cannibalization of other consumer electronics devices such as e-readers, gaming devices, and media players," said Carolina Milanesi, research vice president at Gartner.

Yes, they're talking about tablets demolishing the netbook category (strangled in its crib, essentially), and taking a chunk out of notebooks and accelerating the move away from desktop computers. Manufacturers are already seeing this in their sales numbers.

Some perspective is provided by looking at total worldwide console sales:

Console	(Millions)
Playstation	103
PS2	145
PS3	38
NES	62
SNES	49
N64	33
Gamecube	22
Wii	71
Xbox	24
Xbox 360	42
Game Boy	119
GBA	82
DS	125
PSP	53

So the biggest installed base, worldwide, is the PS2 at 145 million. Not bad, but nothing today is selling in numbers to come close to the PS2. Game consoles are lucky to crack 500,000 sales in a month, and usually it's lower (the Wii is hitting 250,000 per month now). The iPad is looking at getting to 2 million a month by the end of 2011 (it's already over 1.3 million per month), and to keep climbing. Note also that with the new Apple TV you'll be able to wirelessly stream any game you're playing on your iPad right to your TV... or iPhone game, or iPod Touch game. Soon you'll be seeing Apple TV with its own App Store and its own games. Oh, console makers have a lot to worry about.

Still, there are some interesting flaws in the picture. One is that a recent survey showed one third of all iPad owners so far have never downloaded an app; not a single one. Seems odd to me, but that will probably continue to some extent. The iPad is getting some very casual users who aren't computer savvy and may just be content to browse the web, or play their media library. But with a little advertising I bet that percentage will shrink.

Update: Seems like Nielsen was wrong about that statistic; only 9% of iPad owners haven't downloaded an app. They recanted here; no explanation, no apology. Makes you kind of suspect their other numbers...