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(Paul Sakuma)
(Paul Sakuma)

Verizon, Google look to tablets Add to ...

They spent billions of dollars making the traditional cellphone obsolete. Now, just as the smart phone revolution takes hold, the world's biggest technology companies are looking to the next big thing.

Verizon and Google are working on a tablet computer to compete with Apple's wildly successful iPad. Verizon's CEO let slip the news to The Wall Street Journal earlier this week, and sources on Google's side indicated to The Globe and Mail Wednesday that the tablet plans are real.

Increasingly, companies such as Google , Microsoft and Research In Motion may be looking beyond the smart phone and toward the next wave of larger, more powerful mobile computers.

The shift was already under way when Apple launched the iPad earlier this year. The million-selling device has further shaken up the burgeoning industry. In the past two months, reports have surfaced that both Microsoft and HP have postponed or cancelled tablet products. There is also rampant speculation about RIM's plans for expanding beyond the BlackBerry smart phone.

Earlier this month, Rodman Renshaw analyst Ashok Kumar told TheStreet.com that Waterloo, Ont.-based RIM had planned to release a tablet later this year, running on Google's Android operating system. But he said RIM eventually decided to use its own operating system, and has pushed the tablet's launch date to 2011.

A tablet would mark not only RIM's biggest departure from its smart phone roots, but also perhaps its most aggressive entry into the consumer market, where Apple's iPad has found its sweet spot.

A RIM spokeswoman would not discuss whether the company had any plans for a tablet, saying "it's RIM's standard policy to decline comment on rumours and speculation."

RIM's expansion plans may well focus the company on cars rather than tablets. RIM recently acquired QNX Software Systems, an Ottawa-based company that designs software for embedded computers. The purchase appears part of a strategy to better synchronize BlackBerrys with in-car information and entertainment systems - a market that has become much more lucrative as more jurisdictions ban the use of handsets while driving. Such in-car systems are more common in higher-end vehicles, and as one application developer recently put it, "if you own a Lexus, you probably own a BlackBerry."

If RIM were to launch a tablet, some analysts believe the company could fare better than some of its competitors, in large part because of its success in the business world.

"They have two things going for them that make them a viable competitor [to Apple's iPad]potentially," said Forrester analyst Sarah Rotman Epps. "One is their connection to the enterprise. The second is, they have good distribution through carriers such as Verizon and AT&T."

Even though many companies have tried - and failed - for years to get consumers excited about tablet computers, the devices appear to be gaining momentum. A Boston Consulting Group survey released Wednesday found that 28 per cent of respondents - and half of those already familiar with the devices - planned to buy a tablet or e-reader within the next year. Within three years, those numbers jumped to 49 and 73 per cent, respectively.

The main barrier to entry appears to be price. In the United States, the BCG survey found consumers are willing to pay up to about $200 (U.S.) for such devices, but the lowest-end iPad currently sells for more than twice that amount.

If Google enters the tablet market, it will likely try to leverage the open nature of its Android operating system as a selling point for any devices the company or its partners produce. The iPad has been criticized by some for the restrictive nature of its user experience, because most content must be approved by and downloaded from Apple.

However Ms. Rotman Epps said the iPad's "curated experience" may actually be an advantage for Apple, by helping the company maintain the overall quality of the user experience on its tablet.

"Every manufacturer is looking at the tablet market and asking if this is something they should get in to," she said.

"So far, Apple's the only one that's been able to make it work."

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