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Why the Tablet Market is Really the iPad Market
Hugh Pickens writes writes "James Kendrick writes that after Apple introduced the iPad, companies shifted gears to go after this undiscovered new tablet market but in spite of the number of players in tablets, no company has discovered the magic bullet to knock the iPad off the top of the tablet heap. 'What's happening to the 7-inch tablet market is what happened to the PC market several times. Big name desktop PC OEMs, realizing that consumers didn't care about megahertz and megabytes — yes, that long ago — turned to a price war in order to keep sales buoyant,' writes Adrian Kingsley-Hughes. 'Price becomes the differentiating factor, and this in turns competition into a race to the bottom.' Historically, when a race to the bottom is dictated by the market, it's more a sign of a lack of a market in general. If enough buyers aren't willing to pay enough for a product to make producers a profit, the market is just not sufficient. Price is a metric that most people know and understand because it's nowhere as ethereal or complicated as CPU power or screen resolution. Given a $199 tablet next to another for $299, the $100 difference in the price tag will catch the eye before anything else. But if price is such an important metric, why is the iPad — with its premium price tag — so popular? Simple, it was the first tablet to go mass market, and cumulative sales of around 85 million gives the iPad credibility in the eye on potential buyers. 'So the problem with the Kindle Fire — and the Nexus 7 — is the same problem that's plagued the PC industry. Deep and extreme price cuts give the makers no wriggle room to innovate,' writes Kingsley-Hughes. 'By driving prices down to this level so rapidly, both Amazon and Google have irrevocably harmed the tablet market by creating unrealistic price expectations.'"
The Nexus 7 is certainly not a "race to the bottom". It has an excellent spec, including a better CPU than the iPad and similar graphics capability. Okay, it doesn't have everything that the iPad has, but it costs a fraction as much and for most people does the same thing (display web pages, email, Facebook, photos etc).
As for innovation Android itself is innovative, and even on very low end tablets all the features work. Much of the software that makes tablets useful doesn't even run on the tablet anyway, it runs on a server somewhere over the net.
The tablet market is about to explode with the Nexus 7 and Surface. These are devices that people want - cheap but powerful devices for some casual web browsing, ebook reading and Angry Birds. Apple fanbois are getting nervous.
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'By driving prices down to this level so rapidly, both Amazon and Google have irrevocably harmed the tablet market by creating unrealistic price expectations.'"
Uh no. By driving prices down to this level so rapidly, both Amazon and Google have irrevocably harmed Apple's ability to dominate the tablet market by creating realistic price expectations. It's only getting cheaper to make tablets. There's literally dozens of different tablet designs available in this price range, see DealExtreme for numerous examples including all the way up to IPS and A10 for $207 or so.
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"why is the iPad — with its premium price tag — so popular? Simple," It's not because "it was the first tablet to go mass market, and cumulative sales of around 85 million gives the iPad credibility in the eye on potential buyers" as the author states. There were tablets on the mass market long before the iPad showed up. It's because the iPad is a Veblen good. Peoples' preference for it increases as its price goes up because the higher price confers a greater status on having it.
From TFA:
why is the iPad so popular? Simple, it was the first tablet to go mass market
This is nonsense. I have used both iPads and Androids, and the iPad is far easier to learn and use. Apple did many, many things right. And they were NOT first to market a tablet. Many, many people tried to make a successful tablet before the iPad. I have a drawer full of their failures.
Oh, and before anyone calls me an Apple fanboi, let me assure you that while I have respect for their products, I hate Apple as a company. But I am forced to use their products because I am married to an Apple fangoil.
No tablet comes close to the experience of the iPad; no phone comes close to the effectiveness of the iPhone line. No question-- I'm no fanboy
It's only taken the iPhone 2 years to catch up partially with the features which sold me on the far better Android platform (yes I'm am now an Android fanboy) with things like a useful notification bar, multitasking, or home screen widgets, and even now what I don't miss is paying 99c for every bloody app no matter how basic.
There's a difference between features and experiences. Users care more about the overall experience a lot more than a set of features. They are even willing to go without features if they like the experience.
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It's just a repeat of what happened in the smartphone market, and, a long time ago, in the PC market.
Apple introduced a new product, captured a gigantic portion of the market they essentially created, then their marketshare slipped in response to competition from others. But despite the marketshare slip, Apple still makes most of the profits.
Microsoft taught everyone to worship marketshare because they used theirs to bully everyone into buying their other products. Apple seems to know that marketshare doesn't matter so long as you're still raking in money. They'd much rather sell half or a quarter of the devices at a nice profit than three quarters of the devices at a loss.