After gaining an early lead, the iPad was supposed to settle in as a big seller, dominating the high end of the market. Android tablets were supposed to grab most of the unit sales, offering a variety of successful sizes, options and price points. And tablets running proprietary platforms like HP’s WebOS and RIM’s BlackBerry Tablet OS were supposed to bring healthy new sources of revenue to those companies. But that’s not what happened.

What happened is that Apple has asserted an unshakable lead, and no other company other than Amazon has taken significant share. What’s worse, the vast distance between expectations for non-iPad touch tablets and the ugly reality is causing havoc, wrecking companies and transforming whole industries.

The first major casualty was the HP TouchPad(ipad related: convert rmvb to ipad), which shipped July 1. Although HP had enormously high hopes for the tablet, its reception in the market was so bad that seven weeks later HP announced the termination of all WebOS hardware products.

Retail stores had literally hundreds of thousands of units that they knew would never sell at the initial price that started at $500. So they had a fire sale to dump the products starting at $99 each, a price far below cost. In the end, HP had to take a $1 billion cash charge on the fiasco.

The bloodbath was just beginning. Next up: RIM. The company’s BlackBerry PlayBook tablet has sold better than the TouchPad（ipad related: dvd to ipad converter）, but sales were disappointing and have declined since the launch on April 19. RIM’s estimates for unit sales were 2.4 million for second fiscal quarter, but they ended up selling only 200 thousand of them.

In order to dump inventory, RIM temporarily cut $300 off the price of each tablet, selling far below cost. The company had to take a $485 million charge on losses from the PlayBook miscalculation.

Another factor is the Amazon Kindle, which is sold by Amazon at a loss to be recouped later with content purchased on Amazon.com.

Here’s the under-appreciated reality of all this: HP, RIM and Amazon have all moved millions of touch tablets into the market at below cost. This has caused two problems for the market. First, it’s created a domino effect. HP’s fire sale on the TouchPad cut demand for the BlackBerry PlayBook, reducing unit sales. That contributed to RIM’s need for a fire sale of its own. (Plus, Amazon has probably long intended to sell below cost.)

All this crazy, unexpected discounting has both artificially taken market share away from the various Android tablets, and re-set consumer expectations about how much a touch tablet is supposed to cost.

Now, the only way to sell a non-iPad tablet in any significant quantity is to sell it below cost. Android tablet makers are faced with the choice between making a little money on each tablet but selling few, or losing money on each tablet and selling many. It’s a horrible state of affairs for the tablet industry, unless you’re Apple or Amazon. And it’s almost entirely the fault of the iPad(ipad related: convert dvd to ipad).

The iPad’s reception convinced the industry that they could succeed, too. The success of the iPad made HP and RIM vastly over-estimate demand. And the success of the iPad made it impossible to compete against the iPad in the market, forcing companies to ultimately dump inventory at below cost and, in doing so, nearly destroy the Android tablet market.

That’s why the consumer tablet industry hates the iPad. But they’re not the only ones.