While the iPad continues to be a big success, the tablet market offers a harsher climate to vendors other than Apple - and pricing strategies may be an important factor in their difficulties.
Last week Motorola said it sold only 100,000 Xooms during the third quarter, while Apple sold over 11 million iPads in the same period. Meanwhile, Research In Motion sold just 200,000 of its critically slammed PlayBook tablet between June and August.
So far, Samsung has been the most successful challenger, selling about 1.6 million Galaxy tablets during the third quarter, according to data from market research company Canalys.
Predicted to outsell all other challengers - and possibly prove the point that price is critical to compete with Apple - is Amazon, which has seen such pre-order demand for its upcoming Kindle Fire that it decided to ramp up production. The company is "increasing capacity and building millions more than we'd already planned," CEO Jeff Bezos said last week.
What sets the Kindle Fire apart from competing products is its $199 price tag, combined with access to movies, TV shows, songs, magazines and books. Today, products like the Xoom and Samsung's Galaxy Tab 10.1 originally cost more than twice as much as the Kindle Fire, and about the same as the iPad.
"Tablets at high prices, meaning close to that of the iPad, are simply not going to sell meaningful volumes for the foreseeable future," said Richard Windsor, global technology marketing analyst at Nomura International.
Neil Mawston, director at market research company Strategy Analytics, agrees: "Pricing is critical for tablets. Apple can charge a premium, but very few others can," he said.
Amazon slashing its price to the bare minimum has driven growth, whereas Motorola, HTC and others have tried to maximize pricing and that has backfired, according to Mawston.
Also, Hewlett Packard's fire sale of the TouchPad, slashing prices from $499 to $99, following its decision to withdraw webOS hardware, demonstrated that pricing is a critical factor in determining success, according to Canalys. The company ended up shipping 560,000 units, Canalys said.
But pricing isn't the only factor. The weak user interface on Android Honeycomb, the OS that is used on current Android tablets, hasn't helped, according to Roberta Cozza, principal analyst at Gartner.
Amazon has added its own user interface to Android.
Also, the tablet is mostly about media consumption, so you need content and applications to attract users, Cozza said.
"The user experience on Android simply isn't as good as it is on the iPad, and you don't have all of the applications and access to the content Apple is offering," said Windsor.
The way people view the tablet market also puts many vendors at a disadvantage, according to a survey of 4,500 tablet owners in Europe done by market research company CCS Insight.
Almost half see the tablet as a new product category, which means that brand is very important, and Apple is now seen as the safe brand, according to CCS Insight mobile analyst Martin Garner. Also, almost one third see the tablet as part of their computing set up, and that is bad news for phone vendors like HTC and RIM, Garner said.
To turn things around, the Android camp has a lot of work to do.
"It needs pretty hardware designs; more developers to develop tablet optimised applications, services and websites; and Google to develop a more tablet optimised browser and operating system, which it has done with Android 4.0," said Mawston.
Google is taking steps to move in the right direction, but perhaps not moving as fast as it would like, according to Mawston.
RIM also faces an uphill battle.
"The first thing it needs is more attractive hardware," said Mawston.
Besides that it also needs more attractive pricing, better messaging, an improved application store and more of a focus on the consumer, he said.
Despite current challenges most vendors are likely to stick it out. The expected sales volumes are too big for them to just throw in the towel. For example, on Thursday, Motorola launched the Xoom 2 and Motorola Xoom 2 Media Edition. In October, the company also launched the Xoom Family Edition, which costs available for $379.
If vendors get tablets right, the category is still expected to play a big role in the future of computing, with end users performing a growing number of tasks on their tablets, according to Garner. He expects more "proper competitors" to the iPad to arrive next year.
Garner isn't alone in thinking that products launched next year will help redraw the tablet map.
"In 2012, we can expect that established vendors will launch lower cost tablets, as well. If there is a significant price gap to the iPad, then maybe there will be some users that just want a good browsing experience. But I still think vendors will need strong content and services," said Cozza.
Samsung's products have been doing better than other Android-based tablets, but nowhere near as well as its smartphones. However, as the company continues to improve its products, volumes will also grow, Mawston said.
Next year will also see the launch of Windows 8, which will be used on both PCs and tablets, and turn the tablet market a three-horse race between Apple, Google and Microsoft, and supporters of the latter two, according to Mawston.
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