I just realized something: here I am, incredibly interested in the convertible tablet PC form factor, but I haven't once mentioned tablet PCs on this blog of mine. I've discussed them only my personal blog. For example: I've talked about one of the main benefits of using one (that too with examples from one of my MBA courses); the new Dell Latitude XT and Toshiba M700 models; how I think a tablet PC will benefit my life and work style; and which tablet PC I will purchase as soon as I have the money for it (though I am currently rethinking that decision in light of Toshiba's latest model).

Of course, with tablet PCs accounting for only 3% of the fast-growing laptop market [1] -- though that number is expected to rise to 7% in the next few years -- this form factor isn't really on most peoples' radar. That's due to two reasons. First, tablet PCs are more expensive (at least 10-20% more) than regular laptops. Second, OEMs haven't really marketed them to general consumers, choosing instead to focus on the corporate segment or the professional (think: doctors with electronic clipboards) and educational (think: engineering students and their complicated technical drawings) segments.

Market Changes

What was about to change all that -- or so we thought -- was Dell's entry into the tablet PC market. Tablet PC users and enthusiasts expected Dell to offer lower-cost tablets (comparable almost to regular laptops) to the corporate, consumer, and educational segments and to, basically, put tablet PCs on the map as far as the general public was concerned. Dell, however, didn't quite do that. In fact, it priced its Latitude XT about $1,000 higher than its competitors.

What appears to be happening here is that Dell is playing catch up to Fujitsu, Lenovo, HP, and Toshiba (among others) -- all of which already have tablet PCs offerings, and all of which are in at least their third generation. That is, Dell hasn't come into the market to break new ground. It's here to protect its own turf by, for now, targeting only the corporate segment. Roger Kay of Endpoint Technology Associates, as quoted in BusinessWeek's article on Dell's market entry, explains why:

"When someone says they need 20,000 notebooks, 2,000 desktops, and 100 tablets, Dell couldn't bid on that business. Now it can."

And Dell does indeed have a large corporate segment to protect.

What Then of the Consumer Segment?

What has happened instead is that Lenovo routinely gives 25% discounts on its tablet PCs if you order one online and Toshiba has just come out with its M700, which is a real powerhouse of a machine that is pretty reasonably priced as tablet PCs go. Of course, Fujitsu has always been there with its excellent -- and powerful -- tablet PC offerings in lots of different sizes. Will this help bring about the widespread use of tablet PCs in the consumer segment? Probably not. But don't get disheartened just yet.

What Now?

So what will happen to the tablet PC segment in 2008? Well, 2007 was an awesome year for tablet PCs, with lots of new models -- of all shapes, sizes, and performance capabilities -- being released. 2008 promises to be even better. Why? For two reasons.

First, I suspect the consumer market will start to wake up and realize that tablet PCs are aren't really that much more expensive after all. One of the biggest barriers to the adoption of tablet PCs was the fact that they cost a lot, were underpowered, and had a crappy battery life. All three of those have improved over 2007. Cost is still the biggest issue for consumers but, considering the excellent mobility that tablet PCs provide, people seem to be willing to overlook that or pay additional for it. These days in particular, mobility is quickly becoming a key selling point.

Second, two consumer products that were released with much fanfare this year should get consumers interested in tablet PCs. The first is the Apple iPhone with its awesome graphics and fancy touch screen. The second is the Amazon Kindle with its slate form factor and excellent mobility. What do you get when you put those two together? Why a tablet PC, of course. See what I mean? Once consumers put two and two together, the tablet PC should look increasingly interesting. Of course, that's all just theory so far. Let's see how things actually play out. Still, I'm very optimistic. Especially now that Dell has come out with its tablet PC since, in many ways, its market entry that has really validated the form factor.

As for the corporate segment. Well, tablet PCs are still just 3% of the laptop market. But, with offerings from Dell, HP, and Lenovo -- which probably have the three largest corporate hardware install bases -- things should be looking up. Mobility and flexibility are both key here. The more businesses want those in their laptops, the more attractive tablet PCs should look.

Meanwhile, both the professional (especially medical) and educational segments continue to increase their adoption of this form factor, with some universities even requiring their engineering students to use tablet PCs. And though widespread student usage will be the hardest nut to crack -- price is too much of an issue here and, for those who don't have that issue, performance will be one -- you never know what'll happen next year. Who knows, maybe Dell will slash its prices and will start marketing its Latitude XT to students. That would be fun now, wouldn't it?

Here's hoping...

[1] IDC research via BusinessWeek.