Competing Tablet Vendors Eye iPad Success

BOSTON/HELSINKI (Reuters) – The world’s top cellphone maker, Nokia, is working on its own tablet computer, scheduled to reach stores later this year, a technology sector analyst said on Tuesday.

Many other handset makers and PC vendors, including Samsung Electronics Co Ltd and Hewlett-Packard Co , are expected to follow Apple Inc’s move into the new category of devices, between traditional PCs and smartphones.

Over the weekend, Apple sold more than 300,000 iPads on the tablet computer’s first day in stores, a strong showing that roughly matched Wall Street forecasts and mirrored the iPhone’s debut in 2007.

The runaway success of iPhone surprised Nokia, and it took almost two years for the Finnish firm to roll out its first phone model with a large touch screen.

The cellphone maker entered the PC industry last year when it introduced its first laptop. It has sold small phone-like devices for browsing the Internet since 2005, but with very limited success.

“You don’t want to give that much of a lead to Apple because it otherwise becomes insurmountable,” said Ashok Kumar, analyst with Rodman and Renshaw.

“Right now the supply chain (for a Nokia tablet) is being primed up for a fall release. It has to be on the shelf by September-October to meet demand for the holiday window,” Kumar said.

A spokesman for Nokia declined to comment.

OTHERS TO FOLLOW SHORTLY TOO

“The market will play host to a flood of ‘me too’ tablets in 2010, but it’s an immature product category with an unproven use case,” said CCS Insight analyst Geoff Blaber.

“Apple’s brand and service offering means the iPad will be an exception in a category that will struggle to gain consumer acceptance,” Blaber said.

Kumar said the device would likely use Microsoft Corp’s Windows software, but several other analysts said it could also use the new MeeGo operating system, the software venture of Nokia and Intel Corp.

“MeeGo is probably aimed mostly at the tablet market. I don’t think Nokia or Samsung can afford to stay out of the tablet market,” said Tero Kuittinen, analyst at MKM Partners.

“Nokia simply has to make a go at this segment, since it may end up cannibalizing the high-end smartphone market substantially,” Kuittinen said.

Analysts expect Apple to sell 1 million or more iPads in the current quarter ending in June. Wall Street expects the company to sell around 5 million in 2010, although estimates vary widely.