The tablet market has claimed another victim, with Dell announcing that the Streak 7 is no longer available online in the United States.

The news follows Hewlett Packard?s decision to focus on tablets on Windows 8 and get rid of tablets on its own mobile operating system as well as moves by Research In Motion and others to significantly lower prices for 7-inch tablets. Dell likely will not be the last tablet manufacturer to reconsider its tablet strategy as competition continues to heat up.

?This situation is in no way unique to Dell as most vendors are facing the same challenges and opportunities,? said Peter King, director of tablet strategies at Strategy Analytics, Newton, MA.? The bulk of the early vendors have taken on iPad and lost, now it looks like the $200 market has been taken away from them by Amazon selling below cost price in order to drive content sales.?

?A strong nerve and a carefully executed channel strategy is required by all these players as they guide their way through these choppy waters to the next stage whereby vertical market and enterprise start to have a more direct influence on the continually growing tablet market,? he said.

Differentiation needed
These developments are happening because Apple has pretty much shored up the tablet market at the high-end with the iPad and now it looks like Amazon is going the same thing for lower-priced tablets with the early success of its Kindle Fire tablet.

Dell previously killed its 5-inch Streak model in an earlier move. The company said the Streak 7 will continue to be available at several retailers but is likely to drop the Streak completely because sales have not ignited.

?Dell is killing the Streak 7 initially in the US, but inevitably globally as it has seen a poor response to the format,? Mr. King said.

?Now that there is ? in the U.S. only at the moment ? a 7-inch rival which is making serious in-roads, when Dell evaluates their go-to-market strategy, it is clear that they are missing the ecosystem ? music, video, books, apps ? which is a clear differentiator for Apple and Amazon,? he said.

One of the challenges tablet manufacturers face is finding the right price point. Tablets priced on par with the iPad have not done well but when prices come down to $200 or even lower, sales pick up significantly. This is what RIM discovered when it lowered the price of the PlayBook to tablet to $200 and this also partially explains the success of the $200 Kindle Fire tablet.

Another challenge is developing an ecosystem of apps and content that consumers want.

?The broader issue is that, based on the success of the iPad, you?ve seen a lot of computer and electronics manufacturers rush into the tablet space,? said Noah Elkin, principal analyst at eMarketer, New York. 

?It is not hard to build a tablet but it is more challenging building a compelling tablet experience,? he said. ?This is where the traditional electronics and computing manufacturers have been challenged.?

?Assuming that the Kindle Fire is as successful as Amazon suggests it is, part of that success is about how having-to-access content is as important as the devices themselves.?

Breathing space
However, Dell may not be abandoning the tablet market completely. Like HP and RIM, Dell is realizing that its early efforts in the space did not match up and is trying to evaluate how to put its best foot forward here.

The company may also evaluating whether or not it needs to be in the 7-inch tablet segment as the 10-inch segment is forecast to represents 78 percent to 81 percent of global tablet unit sales for the next four years, according to Strategy Analytics.

?The decision to pull this model does not signal Dell?s withdrawal from the tablet market, but it does give it some breathing space to assess the best approach ? Android or Windows 8 or both,? Mr. King said.

?Clearly in the Android space they need to figure out what are the tablet differentiators which will capture the consumer and enterprise imagination, in other words, something beyond a media tablet,? he said.

Final Take
Chantal Tode is associate editor on Mobile Marketer, New York