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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.'"

17 of 657 comments (clear)

  1. People want cheaper tablets by AmiMoJo · · Score: 5, Insightful

    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.

    --
    const int one = 65536; (Silvermoon, Texture.cs)
    SJW, n: "Someone I don't like, and by the way I'm a fuckwit" - AC
    1. Re:People want cheaper tablets by Anonymous Coward · · Score: 5, Funny

      "If that supermodel gives me a handjob, I'd gladly pay $100."

      This is what you sound like.

    2. Re:People want cheaper tablets by Anonymous Coward · · Score: 5, Insightful

      Exactly. The biggest reason that the Nexus 7 is able to undercut the iPad in price is because it's a smaller screen and because Google isn't making a profit on hardware, not because of significantly less features. It's still as every bit capable and more internally, but the smaller screen on a device being sold at near cost is what makes it $200.

      According to financial reports Apple has close to 50% margin on the iPad. That is a lot of dollars to shave off a device price tag, or use to offer superior specs, if you have a different business model or can live with more normal margins.

    3. Re:People want cheaper tablets by chrb · · Score: 5, Insightful
      From the article:

      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.

      This is just stating the obvious - the iPad has had more sales, because it has been available for longer. If the Nexus 7 had been released in April two years ago (like the iPad), and the iPad were released last month, then the Nexus 7 would have sold more units.

      By driving prices down to this level so rapidly, both Amazon and Google have irrevocably harmed the tablet market by creating unrealistic price expectations.

      This is not true. Did Nokia irrevocably harm the phone market by constantly driving down the price of a phone until it hit a low of $19? Did Asus irrevocably harm the laptop market by releasing the first cheap netbook? Did Dell harm the PC market by pursuing lower and lower prices? Sure, you could argue that, or you could argue that cheaper technology expands the market - by making it accessible to people on a lower income. Cell phones are cheaper now than ever before, but the market has expanded so that 5.2 billion people now have cell phones, and the total market is still growing (two years ago revenue from phone sales passed $1 trillion and revenue from associated mobile services like calls etc. is also about $1 trillion).

    4. Re:People want cheaper tablets by American+AC+in+Paris · · Score: 5, Funny

      Apple fanbois are getting nervous.

      As a long-time fan of Apple's work and devices, I can attest to being quite nervous about the Nexus 7. I mean, after the beating Apple's taken from the Galaxy Tab, the Xoom, the XYBOARD, the Nook, the Playbook, and the Kindle, I don't think they could withstand a gentle breeze, much less the Nexus 7 juggernaut currently bearing down on them.

      Don't even talk about the terror that is the smartphone front; that keeps me up at nights with the chills.

      How much beleaguering can one company take?

      :D

      --

      Obliteracy: Words with explosions

    5. Re:People want cheaper tablets by Paul+Slocum · · Score: 5, Informative

      I'm an iOS music app developer, and for music apps and action games, despite the similar hardware Android just doesn't cut it yet performance-wise. Check out the touch-to-sound latency times below that another music app developer posted last week. For many apps it doesn't matter, but for audio and many types of games, 200ms latency is too much! I haven't tested Android myself, but on iOS I get about 40ms.

      WaveSynth for Android 1.0.1
      HTC (4.0.3) -> 186ms
      Google Nexus 7 (4.1.1 Jellybean) -> 213ms
      Galaxy S2 (4.0.3) -> 256ms

      WaveSynth 2.1
      iPhone 4 (5.1.1) -> 49ms

      link

    6. Re:People want cheaper tablets by peragrin · · Score: 5, Insightful

      Because customizing takes time away from product and usability testing.

      There are some features in UI's which shouldn't be messed about with. It is also why android ports of iOS apps generally are easier to use and behave better than android only apps.

      Yes android has better features than iOS. Linux has better features than windows 7. Guess which ones sell more?

      Having a feature means nothing if using it is to complicated.

      --
      i thought once I was found, but it was only a dream.
    7. Re:People want cheaper tablets by jmorris42 · · Score: 5, Informative

      Go look at iFixit's teardown. The nexus has about 1/3 of the battery and runs about as long as an iPad3. The display on the iPad drove up the cost and sucks battery because they pushed it out before the tech was really ready.

      And I'd bet profit is being banked on the Nexus at launch. Tablets are insanely overpriced. You can go to Walmart today and pick up a netbook for about $220 with a 10.1 inch display, hard drive, Windows 7 license, all the extra fans and crap to run Intel Inside and a more complicated laptop housing. We were told an SoC built around ARM was simplier, cheaper and needed less power. So why do they cost so much more?

      --
      Democrat delenda est
    8. Re:People want cheaper tablets by Anonymous Coward · · Score: 5, Funny

      shame about the battery li

    9. Re:People want cheaper tablets by crankyspice · · Score: 5, Interesting

      How can Android look like a cheap copy of the iOS experience when Android is infinitely more customizable and feature-filled than iProducts?

      Oh, I don't know... Little things like the friggin' Android Market not working on 2.x era devices with large displays (1024 vertical) without rotating the device to landscape and back again, because until the screen filled up with options (which would never happen in portrait mode), you couldn't flip to the next 'page' of results... Little fit-and-finish things like that let you know Google didn't pump nearly as much time and effort into QA as Apple did.

      The iOS experience is unflaggingly smooth and responsive, and the apps, as a general rule, look better (higher level of "fit and finish"). For instance, compare GoodReader with ezPDF or anything else in the Android ecosystem...

      Let's not beat around the bush here. iOS offers a very watered-down featureset so non-tech saavy people don't have trouble with it. That's fine for people like you, but I wouldn't ever call Android a copy of iOS in any way when Android simply does more than iOS does.

      Filesystems. I hate the way iOS blocks applications from accessing each other's files (it's up to each app developer to 'announce' (via the API) what files it can accept, and equally up to the other apps to support the 'Open in...' functionality), but, I get it. Android, I hate the way files are scattered everywhere, with no rhyme or reason (I know there are (now?) guidelines, but they're not enforced, and often when apps *cough*dropbox*cough* try to be(come) 'good citizens,' it breaks functionality others relied on). I have some apps that refuse to see the non-standard SD card mount point on the rooted PRS-T1 (/extsd instead of /sdcard, which Sony inexplicably uses to refer to a portion of the built-in flash), or to see any files not on an SD card even if the device has gigabytes of built-in storage...

      Six of one, half-dozen of the other. iOS is like a gated community, Android is more like Bartertown. Both can be a PITA to deal with, for different reasons. But since I'm using a tablet to actually Get Things Done, I'd rather have the smooth, predictable, curated experience of an iOS device than the essentially lawless "hope this is gonna work!" chaos of the current Android ecosystem.

      But just because the Android stack is more 'open' doesn't mean it's more 'innovative,' so my original question stands. In what way(s) can Android be described as 'innovative'?

      --
      geek. lawyer.
    10. Re:People want cheaper tablets by fwarren · · Score: 5, Interesting

      Us Linux folks have been waiting 10 years for this. The day that Microsoft started eating the OEM's lunch. At some point they will have to compete against Microsoft. Since Microsoft gets Windows for "free" the only way to match the price point on the hardware will be to load an OS that costs them less than Windows.

      With the Windows 8 App store it looks like Valve has figured out they had better have an exit strategy for leaving the Windows PC Market. Hopefully the OEMs like Dell, HP and Lenovo will figure this out soon as well.

      --
      vi + /etc over regedit any day of the week.
    11. Re:People want cheaper tablets by steveha · · Score: 5, Insightful

      So why do [tablets] cost so much more?

      Because Apple enjoys making a 40% margin on tablets, and Apple's customers don't mind paying it. Then Android competitors have (I think) set their prices using iPad prices as a guide.

      The iPad is still selling for about three reasons: Apple has been milking their first-mover advantage, Apple has done a great job on the user experience, and the iPad hardware is excellent quality. This has been enough, especially given the problems in the Android tablets until about this year or so.

      But now, with Jellybean, Android is a great tablet experience. Some folks will say it still doesn't match the iPad, but it's way better than before. Now, quality tablets are here, at attractive price points.

      I love my Nexus 7 tablet. It's everything I want in a tablet. (Well, I guess I'd like HDMI and a card reader, but I really haven't needed them.) Do I wish I had spent twice as much for an iPad 2? No, I really don't.

      I can see the day coming when more Android tablets are sold than Apple tablets, in a replay of what happened in the smartphone market.

      steveha

      --
      lf(1): it's like ls(1) but sorts filenames by extension, tersely
    12. Re:People want cheaper tablets by Dixie_Flatline · · Score: 5, Insightful

      Your analysis is needlessly insulting and, frankly, wrong as near as I can tell.

      I make video games for a living. I've worked on triple-A Xbox (original and 360) titles as a programmer. I've got a decent math background, more than a passing interest in physics, climate science, etc., etc. I don't really feel it's necessary to divulge all my credentials, but I'm trying to make the point that I'm not just some random idiot. I was a pro Unix sysadmin in University to help pay for school. I ran my own Slackware and FreeBSD mail servers.

      I'm typing this on an iPad. It's not because it's so simple it saves me from myself, it's because it's so simple it saves me any extra hassle. It's a good environment. I get things done on my iPad. I use it more than I was expecting to, to the point where I don't feel it terribly necessary to sit at my desktop machine more than a couple times a week.

      Having my own servers opened my eyes to the tyranny of choice. I think Linux and BSD are great, but I spent just as much time obsessively fiddling with things as anything. Different window managers, new browsers, random command line tools...none of which objectively added to my productivity.

      And that's what studies find, too. You can offer users choices that make them feel subjectively better and more productive while having the opposite effect. Users don't always know what they want or need. Sometimes you have to give them just one thing that works really well and leave it at that. I could design a door a thousand different ways, and 950 of them would be terrible. (Don't believe me? Read "The Design of Everyday Things". You'll never look at a door the same again.) Why would I give people the choice of a zillion bad doors? I should just give them one or two really good ones.

      iPads are popular because they fulfil their function very well. Don't sit and bash on both Apple and Apple users for a well designed product and the desire to use a well designed product. I won't cast aspersions on Android tablets; I'm sure many of them are also quite good. But all you're doing here is calling names and vaguely dressing up some Apple hate.

    13. Re:People want cheaper tablets by ozmanjusri · · Score: 5, Interesting

      Yep, we've been loading Novo 7 Tornados with manuals, training PDFs, OHS links, etc and handing them out to trainees and customers.

      At $75 each, they're cheaper than printed manuals and far more likely to be carried and used. The have 1GHz processors, 1GB RAM, 8GB storage, and Android 4.03...

      --
      "I've got more toys than Teruhisa Kitahara."
    14. Re:People want cheaper tablets by PyroMosh · · Score: 5, Funny

      Both casual observation and hard data disagree with your assertion.

      Samsung makes lots of phones (I have not read that they make double the number of Apple, but I have read recently that they surpassed them. It's hard to imagine that they doubled Apple's production numbers the same quarter they surpassed them), but they make a lot of *different* phones.

      All of the Android manufacturers do. How many Android phones do you think are one step up from a dumb flip phone, but run Android as an OS?

      All the major carriers offer these phones.

      I'm willing to bet that a lot of the "true" smart phones at the lower end aren't used as smart phones much, either.

      Through observation in the wild, I see iPhones everywhere, every day. Android phones? They're there, but they are hardly ubiquitous like the iPhone.

      Now the data: Look anywhere that is likely to have a wide representative share of users. Let's take Wikimedia, for instance: the iPhone accounts for 7% of traffic. Android is 4.73% (and tablets are probably included in this number, unlike iOS, which has the iPad segregated).

      http://en.wikipedia.org/wiki/File:Wikimedia_OS_share_pie_chart.png

      I think the Android market share is either inflated, or they're counting people who bought an Android phone, have no data plan, have never fired up a browser, never opened the app store, and never did anything but make calls with it.

      It counts if all you're interested is how many devices are in the wild, but honestly, what can you do with this statistic that is useful?

      If I want to develop and deploy an app, I want to know the actual audience that can potentially be reached by it. I have some visibility of that, but not much. It's further complicated by wide fragmentation on the Android platform.

      According to the math they did here, Google is doing about 1 Billion downloads a month. Apple is doing about 1.25 Billion. That's a notable, but not insurmountable gap. But, yeah. Right now Apple is winning by any objective, realistic, meaningful measurement.

      http://techcrunch.com/2012/05/07/google-play-about-to-pass-15-billion-downloads-pssht-it-did-that-weeks-ago/

      Disclaimer: I don't own any iOS products, and I really want Google to get their act together, because I really dislike the whole walled garden approach Apple and Microsoft are taking.

      Android isn't something people *want* now. It's something people settle for because they don't want to pay the Apple premium. That's not necessarily a bad thing. Windows wasn't something people clamored for, either. It was just a standard.

      My problem is that I don't want to see a standard that has a walled garden model win.

    15. Re:People want cheaper tablets by justforgetme · · Score: 5, Interesting

      Ok, I really don't like advocation for apple inc but:

      Is the nexus7 a shell of glass and aluminium? No. That is one of the problems I have had with
      Android tablets. They are too plasticky, usually after a few weeks use they look far worse than
      they begun with and from day one you get a hint of a device made to accounts, not to specs.

      The apple device is perceived as a better device because in every perceptional level it is a
      better device; not because it was there first.

      --
      -- no sig today
  2. Re:Er, it's that iDevices are *better*, silly. by thegarbz · · Score: 5, Informative

    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

    The former statement appears to contradict the latter. I'm sorry you think your shiny iThing is the be all and end all, but the reality is that Android phones come out of the box with a different (see that word? you may want to learn that word if you want to get rid of your fanboy label) feature set than Apple's offerings. Some of us *gasp* actually weighed up the feature set of both platforms not ever having owned a smartphone and have chosen willingly to go with Android.

    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.