The iPad's biggest competitor hasn't been invented yet

Steve Jobs had some strong words for Apple’s competitors as he launched the iPad 2 in San Francisco earlier this week. Apple’s chief executive said that the original iPad, released less than a year ago, had left the competition “flummoxed”. “They went back to the drawing boards,” he said. “They tore up their designs because they weren’t competitive.”

What might sound like hubris to those who are unconvinced by the fervour that sounds any new Apple product is largely supported by the facts. By the end of 2010, Apple had sold 15 million iPads. The company estimates its share of the market at 90 per cent or more. The most pessimistic view of Apple’s place in the tablet market right now suggests that its share may have fallen as low as 75 per cent in the last quarter of 2010. Overall, though, the tablet market remains Apple’s.

The competition is growing, however. Motorola’s Xoom tablet, released in the US last month and due in Britain some time next month, has had generally positive reviews; there are high hopes for the BlackBerry PlayBook tablet, which is expected next month; and Samsung is about to release the second version of its Galaxy Tab, the first version of which was greeted enthusiastically by technology writers but, by the company’s own estimation, failed to sell in significant numbers.

But as many competitors are readying their first tablet computers, Apple has now announced its second. The iPad 2 is lighter and thinner than its predecessor, is powered by a faster processor and has front and back cameras for video conferencing. Crucially, though, it can take advantage of an existing ecosystem: a new version of Apple’s iOS operating system and around 65,000 iPad-specific apps.

Who can take it on? "None of the ones that we’ve heard from so far," says Sarah Rotman Epps, of analysts Forrester. She says the tablets we’ve seen so far and the ones that are about to be released are "solid products with fatally flawed product strategies".

Speaking at the iPad 2 launch, Steve Jobs reminded the audience that Apple had launched the first iPad at "an unbelievable price". He said: "People weren’t sure that it was an unbelievable price. Well, ask our competitors now..."

Rotman Epps agrees and says that the key challenge to Apple is likely to come from a company that is prepared to discount the tablet aggressively to get customers on board. She tips Amazon as one company that might be prepared to do this. With its own e-book, digital music and online storage services already in place and a streaming film service reportedly on its way, Amazon certainly has the makings of a service that could compete with Apple’s iTunes and App Store.

Other companies to watch, says Rotman Epps, include Sony - who could bring a formidable gaming pedigree to a tablet computer - and Microsoft. She says: "We haven’t heard the last from Microsoft."

Apple describes the iPad as a "post-PC" device, though admittedly one that has to be connected to a PC with a cable before you can use it. Talking to journalists last year, Jobs said: "I’m trying to think of a good analogy. When we were an agrarian nation, all cars were trucks. But as people moved more towards urban centers, people started to get into cars. I think PCs are going to be like trucks. Less people will need them."

The tablet takes computing into places it could previously go. Archaeologists are using them in the field, doctors are using them in patient consultations and teachers are using them in the classroom. Their mobility, combined with power, changes how they can be used. Passing a tablet computer around is far more natural than passing a laptop back and forth.

To Jobs’ analogy of trucks and cars, we could add smartphones, perhaps as the equivalent of the Boris Bike: always around when you need them, handy for a quick trip. According to Strategy Analytics, almost 300 million smartphones were shipped worldwide last year, a figure that puts Apple’s 15 million iPads into perspective. In the last quarter of 2010, smartphone shipments overtook PC shipments for the first time ever. Both smartphones and tablets will continue to erode demand for PCs.

Motorola’s new Atrix mobile phone has a ‘lapdock’ accessory. Plug the phone in and it powers your laptop. Add a multimedia dock and the phone will connect to your TV too. In future your ‘computer’ could be whatever screen your phone is connected to - and not connected physically either, as Apple is showing with its AirPlay system, your smartphone or tablet is perfectly capable of streaming content wirelessly.

We are just at the beginning of the ‘post-PC’ era. RBC Capital, in a report published earlier this week, predicted that there will be 400 million tablet users worldwide by 2014. That’s still only a third of the size of the current PC market but times are changing. And fast.