2010 Year in Review: Apple launches iPad, creates a tablet wave

The news: Apple (NASDAQ:AAPL) unveiled the company's breathlessly anticipated new tablet device, called the iPad, at a media event in late January.

Hailing the device as something that could bridge the gap between laptops and smartphones, Apple CEO Steve Jobs said the iPad was "so much more intimate than a laptop, so much more capable than a smartphone."

The 9.7-inch iPad was the newest extension of Apple's App Store and iTunes content distribution empire, and had all the hallmarks of a sleek, well-designed (if first generation) Apple device. Yet many analysts were skeptical of the market for such a device.

Nevertheless, Apple managed to prove the market. The company announced in early May that it sold 1 million units within the device's first month of availability.

Soon, a cluster of handset and computer makers were taking stock of their own tablet strategies, trying to figure out how best to capitalize on the excitement Apple had generated.

Hewlett-Packard, LG, Samsung, Motorola (NYSE:MOT) and Research In Motion (NASDAQ:RIMM) all threw their hats into the tablet ring during the summer and fall, and many others, like Acer and ZTE, also promised tablets of their own. 

Apple, meanwhile, sold 3.27 million iPads in the device's first quarter of availability and 4.19 million units during its second quarter on the market, numbers slightly below analyst expectations but still good enough to capture 95 percent of the tablet market in the third quarter, according to research firm Strategy Analytics.

The only credible competitor that actually made it to market in 2010 was Samsung's Android-powered GalaxyTab, which it sold through all four of the Tier 1 U.S. carriers as well as U.S. Cellular. Samsung sold 1 million GalaxyTabs in the product's first two months of availability. 

The slate of tablets scheduled for release in 2011--whether RIM's PlayBook or HP's webOS tablet--should create more competition, although Apple could retain the upper hand with a fancy iPad 2.

Why it was significant: The iPad went from a rumor to a reality to a must-have gadget for early-adopters to a trendsetter in a matter of months. One significant feature of the iPad is the month-to-month data pricing by AT&T Mobility (NYSE:T), which has since been emulated by a number of operators. The iPad's success likely is due to a mix of hype, business savvy and solid engineering on Apple's part. The iPad lit a fire under a host of companies to develop their own tablets, single-handedly kicking a moribund product category back into life and reinventing tablets from awkward enterprise gadgets into mass-market devices.

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