At Deloitte, we coined the phrase "Goldilocks device" for the tablet.
Smaller than a PC, but bigger than a smart phone, we said that tablets would be "just right" for many consumers' computing needs. (A brief pat on our own backs: back on January 19, a week before Apple even announced the iPad, Deloitte predicted 2010 tablet sales of more than 10 million - that at a time when the high estimate from any other analyst or firm was 1 million units.)
Based on our subsequent research, it may be a good idea to keep thinking of tablets as filling the space between the PC and the cell phone in ways other than size and price.
Although we will probably see a less fragmented tablet market than we have in cell phones, it will also likely not be as monolithic as PCs. There is no magic bullet tablet that will solve all consumer and enterprise needs.
First, there will be a range of sizes. Probably nothing under 5 inches, and nothing bigger than 12 inches - beyond those two ranges you might as well buy a smart phone or a regular PC. The sweet spot is likely to be 7 to 10 inches, and that will probably represent 80 per cent of all tablets sold.
As an aside: it is important to remember that these measurements are diagonal screen size. However, the user experience is defined by screen area: a 7-inch tablet may not seem that much smaller than a 9.7-inch iPad, but the viewing area is about 48 per cent smaller, which will be a big deal for many applications.
Price will be a differentiator too. Apple historically takes the high end of the market, so the iPad's $500-900 price point will likely remain the upper bound. Based on Apple's iPhone product strategy, we are much more likely to see extra features on iPads while the price stays constant, rather than aggressive price reductions. This will create room for other tablets at different price points. Based on current available technologies, that suggests that most of the non-iPad market will be $300-600. But it will all be about trade offs: you want a bigger screen, or two cameras? Then you will lose something else: battery life, nice case, user interface, 3G radio, etc.
You may have read about ultra low priced tablets: $100 or less. They may exist, but will make up a very small part of the market. It is essentially impossible to create a decent tablet at those prices. To give you an idea, the iPad screen alone would cost much more than that at retail. There have already been some attempts to save big chunks of money by going for lower resolution screens, inadequate batteries or resistive touch technology (rather than the iPad's capacitive touch): in every case the reviews have been scathing. For the next few years, a tablet that customers don't hate will be at least $250.
There are many other ways tablets can be differentiated: security, software, enterprise friendliness, user interface, cameras, motion sensors, processor speed, size of memory, ports, video playback, and the list goes on. At the end of the day, buying a tablet is going to be like buying a vehicle. Do you want a pick up truck or a sports car? Minivan or sedan? No single configuration will likely appeal to more than 30-40 per cent of the potential market.