During a short trip over President’s Weekend to escape my wonderful and still snow covered front yard here in New York, I had the opportunity to watch someone actually using his tablet computer before and during the flight. This was quite an interesting experience and, while there is absolutely no statistical validity to this experience, it still got me thinking about what the tablet could become in the future.

The device was definitely a work-related device, allowing the user to check e-mail messages and open attachments to view files while at the gate and again minutes after boarding. Getting closer to take off, it was time for all electronic devices, including computers, to be shut down. Furthermore, the cabin crew asked for all notebook computers to be stowed in an overhead bin or below the seat. Not so for the tablet, it was put in the seat pocket with no complaints from the airline’s cabin crew. Once in the air and above 10,000 ft. we could start using electronics again and the tablet was running before we reached the 11,000 ft. mark! My own notebook computer entertained with the normal boot sequence as we climbed for at least another 3,000 ft. As the airplane was equipped with a Wi-Fi connection, the work-related activities continued for another hour or so. After all e-mails were read and replies sent, the tablet turned instantly into a portable DVD player to finish a movie. The picture was much better and larger than any in-seat video screen could provide. After finishing the movie the tablet turned into a handheld gaming device before it was eventually turned off and stowed away.

While this is by no imagination unusual usage, I was still intrigued by the versatility someone found in a device that 12 months ago wasn’t even on the market. If such a device could so easily penetrate typical day-to-day activities, what could possibly hinder the massive adoption as predicted by many analysts?

The first thing that came to mind was the price. While certainly priced aggressively by Apple in the beginning, everyone expected the devices that followed to easily beat Apple’s pricing. This didn’t happen in 2010 as only no-name products were able to beat the Apple pricing. Still today, new tablets coming into the market orient themselves at the Apple pricing levels. If the prices would come down into the sub $300 range, adoption of the device would certainly pick up speed and we could see unit sales in the high double-digits for 2011. So the question is what controls the tablet pricing in the market today?

As a display industry person to begin with, my first thought was the display size. We are talking high-end LCD panels for most of these devices and I looked at some market pricing (mostly based on MSRP) versus the display size as shown in the first chart. There is almost no correlation between screen size and MSRP. This came as big surprise. Obviously, something else is influencing the price more than the display, which is the most prominent feature of any tablet device.

Indeed the memory size is a much better indicator for the price as shown in the second chart. Given that memory size has such an influence on the device price, we can certainly expect further price reductions for the device as flash memory prices drop in the future. Memory prices are always going down and with such an application coming on as strong as the tablet, investments will ensure that this trend continues as companies fight for market share.

For now, the display (including the touch interface) is enabling the tablet of today, perhaps not as a price differentiator, but certainly as a performance differentiator. It will also influence the size mix in the existing and future TFT Fabs. With the strong demand for these smaller-sized displays, the larger and newer Fabs may not be dedicated to large screen TVs anymore.

If you have any other ideas on how the usage of tablets will influence adoption and what the best size will be, send me an e-mail.