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During my two days at the South by Southwest festival I’ve rarely been more than arms reach from a brand new iPad 2. The high density of extra early adopters ensured that the distinctive sound of the tablet’s magnetic cover (see video) rang constantly in my ears.

But out there in the real world, tablets are still rare. The first packing Google’s tablet-ezed version of its Android operating system, the Motorola Xoom, seems unlikely to change that. Its $800 price tag will likely restrict is users to the relatively well heeled people this survey suggests are users of the iPad.

I heard a good prediction of when we will reach the tipping point that will see that change at a panel today on the battle between Apple and Google’s mobile technologies. Tablets will surge towards ubiquity, said Will Sullivan, who researches mobile web use for journalism at the University of Missouri, “once the Xoom becomes obsolete.”

That tablet’s price is simply too high to push tablets into new, less rich corners of society. But once it is one upped by better equipped Android tablets late this year, that $800 price tag will be ripped away and tablet prices will start dropping.

We’ve seen that happen with smart phones. Android phones are now as cheap as $50 with a two year contract, a price point the now-outdated iPhone 3GS has also fallen to. Arguably the price drop process will happen faster with tablets because the iPad’s rivals are at less of a standing start than mobile companies were when the iPhone appeared: Google now got the operating system in place and just needs hardware to put it on.

It is when tablets start dipping into less premium markets, added Sullivan, that they will have a real impact on the way we use computing, and start to eat away at the wider computing industry: “Casual consumers will find you can do video chat, gaming and think maybe they don’t need a laptop anymore.”

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