Researcher says the devices will become much more popular, but Microsoft could make or break the market.

The Tablet PC market is set for steady growth between now and the end of the decade, research firm In-Stat said.

However, the biggest hurdle to this growth could come from the Tablet PC’s main backer, Microsoft, if that company decides it is serious in promoting a new lower-priced, consumer-oriented product category, In-Stat says.

The Tablet PC market is due to grow from $1.2 billion in 2004 to $5.4 billion in 2009, with the U.S. remaining the biggest market followed by Europe then Asia, according to Brian O’Rourke, a senior analyst at the company. In-Stat classifies Tablet PCs as devices that run the Windows XP Tablet PC Edition operating system.

To date, Tablet PCs have been more expensive than notebook PCs and used mainly in vertical markets such as health care, real estate, and insurance, O’Rourke says.

But there signs that companies outside of these specialist markets are beginning to purchase the machines for use by middle managers. One of the main reasons for the growing, if still limited, popularity of these devices is falling prices. Average prices for Tablet PCs have dropped well below $2000 this year, he says.

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