Tesco enters the tablet fray with Hudl

It's a place you might go to for tomatoes, tea or tinned tuna - but would you really go to Tesco in search of a tablet computer? The supermarket chain is confident that its shoppers will see the attractions of getting into the tablet game via a well-known brand.

But what does the arrival of the Hudl - for that is the name of the product the company is launching this morning - mean for the overall market?

What is immediately clear is that Tesco is taking its tablet very seriously. Unlike some cheap Android tablets launched by other unlikely firms - remember Next's attempt? - this looks a competitive and reasonably high-spec offering. It runs the latest version of Android, has a 1.5 GHz processor, an HD screen and expandable storage.

The 7in device looks at first sight like any other small Android tablet - the Tesco content is mostly hidden under a "T" logo at the bottom left. Tapping here takes you to services like online shopping and the Blinkbox on-demand film service, bought by Tesco a couple of years ago.

So where will it fit into an increasingly competitive market? From the Google Nexus 7 to the Amazon Kindle Fire, there is now plenty of choice in the £100-£200 range. The Hudl at £119 should compete well here - though it probably needs to be that cheap to make up for the fact that many consumers won't see it as a recognised electronics brand.

What is really significant about this new arrival is the way tablets are now becoming everyday devices, just three years after Apple launched the iPad and kick-started this revolution. Some forecasters now see sales of tablets overtaking sales of PCs by the end of this year.

Lower prices will accelerate that trend, though I'm still slightly puzzled by how Tesco can make any profit on the Hudl when it is priced at £119. After all, Amazon's Jeff Bezos told us last year that the Kindle Fire HD - at £159 - made not a penny in profit for his company. But Matt Atkinson, Tesco's chief marketing officer, told me that his product would definitely be commercially viable.

I suppose that each time a new entrant comes into the market they find that the components have become just a little cheaper, so they can offer similar products to the established players at a keener price.

You might think that would spell trouble for the market leader Apple, but it has managed to keep on selling iPads very profitably despite the yawning price gap opening up with rival Android devices. The Apple brand remains very desirable - and the company won't have too many worries about its shrinking share of the market as long as it can keep profit margins high.

The other company which has tried to compete at the top end of the market, with tablets which aim to be work machines as well as playthings, is Microsoft. So far, its Surface has failed to make much of an impact on the market, with the company writing off $1bn after missing sales targets. But the company which first showed off the Tablet PC concept in 2001 - whatever happened to that? - isn't giving up. Tonight Microsoft will be unveiling two new Surface tablets - the firm which built its fortunes on the PC revolution knows that it must be part of this new wave of computing.