Tablets Take Media Limelight From Smartphones

With Amazon poised to enter the tablet fray with its own much-anticipated device, the category popularized by the iPad is likely to get another boost. Not only is the Apple tablet likely to face its most serious test to date, but a lower-cost Amazon model also could help accelerate tablet adoption overall and establish it as the "third category" between PCs and mobile phones Steve Jobs described at the iPad's launch last year.


At present, tablet penetration in the U.S. stands at about 6% compared to about 35% for smartphones, with the iPad accounting for the vast majority of users so far. Despite the small, early-adopter audience to date, research shows tablets are living up to their billing as media-centric portable devices. In that vein, they pose a looming threat to mobile phones and smartphones as the original "third screen" for using apps, watching video, mobile shopping and other activities.


Findings from research firm I-Stat this week, for instance, indicate half of all tablet users are watching both full-length movies and TV shows on the devices. The research firm projects that by 2015, 65% of the U.S. population will own a smartphone or tablet and 86% will watch video on their devices. But analyst Keith Nissen points out that "tablets, in particular, have become a primary video device, both inside and outside the home."


Besides having a larger screen than a phone, that's the key difference-maker for the tablet: its ability to bridge the home, office and on-the-go realm. Obviously, no one's going to whip a tablet out of their back pocket as they would a smartphone when they're out and about, or in a store, but that doesn't mean they won't use it for shopping. New data from retail clients of e-commerce software firm Ability Commerce show that while the iPhone and Android smartphones drive more traffic, the iPad ends up driving a bigger proportion of mobile sales.


Recent research from Forrester backs up those findings, suggesting that among online shoppers who have tablets, most prefer tablets to smartphones when making Internet purchases. Of course, people could use smartphones to browse and compare prices while they're in stores, then complete a transaction via their tablet when they get home. In that sense, phones and tablet could complement each other.


But as the tablet audience grows, it will pose a growing challenge to the smartphone as a mobile media device, especially for apps, the Web, games and video. That means it may also take brand advertising dollars that might have otherwise gone toward apps or other content geared to smartphones. Even with mobile rich-media innovations, it's still hard for a 4-inch screen to compete with a 7- or 10-inch screen.


Polo Ralph Lauren's exclusive takeover of The New York Times iPad app during September in connection with Fashion Week -- the first time a single advertiser has bought out the app -- is a sign that big brands are taking the tablet format seriously. So will the smartphone become just a glorified voice device? Not necessarily, but over time it may be defined more as a utility for messaging, chatting and social networking than media consumption, as tablets proliferate across the gadget landscape.

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