Where is Microsoft's tablet? where is Google's tablet? etc etc etc.....
They're coming, bet on it. If something is successful and can be copied they will do it. Although it will likely be only the OS that they'll make, leaving the hardware to anyone.
As a matter of fact, Steve Ballmer predicted that Portable Handheld devices would one day overtake PCs. That was back in 2000.
Actually, Capt. Kirk and Dick Tracy kind of beat him to the punch. That's one of those predictions that anyone can make. I predict that in the future personal transportation that flies will overtake that which rolls on rubber tires on concrete pathways. (Kind of inevitable don't you think?)
In my opinion, the only other tablet worth mentioning is the HP Tablet running WebOS. I'm sure the software and hardware will integrate nicely as Apple has managed to do with its iPad.
I am going to suggest that the RIM Playbook might actually do pretty well. Simple because of name recognition more than anything else.
Actually, Capt. Kirk and Dick Tracy kind of beat him to the punch. That's one of those predictions that anyone can make. I predict that in the future personal transportation that flies will overtake that which rolls on rubber tires on concrete pathways. (Kind of inevitable don't you think?)
Not really, given the amount of energy involved in elevating a vehicle of any kind. But your point stands. :-)
It seems to me the right framing for an article like this is something along the lines of "A few modestly selling competitors to the iPad are just now tentatively making their way onto the market, nearly a year after that device's introduction, and are managing to eke out a few percentage points of share. It remains to be seen how additional announced products will fair in the market that the iPod created."
That, rather than "the tablet market is heating up" or "tablet sales are up" or any of that. The iPad was a new kind of device that caught the incumbents napping, it's had the "tablet market" (as that term now must be defined) to itself up till now, and whatever variations in that market have to be attributed to the iPad itself, not some imaginary larger context where the iPad's fortunes must be compared to nearly imaginary devices.
What part of that 26% rise in "tablet sales" was accounted for by the iPad? Do the math: Apple sold 3.27 million in the quarter the article sites as having 3.5 million tablet sales total, all but 230,000. Against 4.19 million iPads and 4.4 million total tablets this quarter, or all but 210, 000. In other words, the non-iPad segment of the "tablet market" is actually shrinking, and from this we are to understand that the "tablet wars are up and running"?
I totally agree. While collectively Android devices will be competing against iOS devices, individually, they'll be competing against each other. What's more, they'll all be racing to the bottom, which will kill their margins, while Google will laugh all the way to the bank, because they will make money regardless. Meanwhile, the iPad will continue to turn in impressive numbers.
While people say they prefer choice, it's really not true. Too many choices is complicated and confusing. Yes, in the Android world will be able to "choose" between Motorola and Samsung and HTC and whatnot, but those choices are about as meaningful as closing your eyes and picking one at random.
If the above is true, then how does it follow that there will be too much choice? There will be a tablet from each OEM (and of course in different sizes and memory/connectivity configs) but that's about it. That certainly won't be too much choice. I suspect tablets are going to be handled differently from phones. OEMs aren't going to be putting out a new tablet line-up every 6 months. Once each OEM nails down a form factor, all you'll really see are spec bumps....exactly like Apple is doing now.
As for margins, we'll see. I suspect that even Apple's margins will drop as competition heats up....albeit not to the same level as the other OEMs. And I suspect this will happen in the phone space too....just give it time. There was a long lag and no effective competition for the iPhone until Android's phenomnal rise this year. And now you have not just Android but Windows Phone 7, an upgraded Symbian and a revamped Blackberry OS nipping at the iPhone's heels. It's not too hard to command good margins when you have 95% of the market. But when you have substantially less than that? I don't think these dynamics (and by that I mean Apple's crazy margins) will hold forever....though Apple will always make tons of cash for its shareholders.
As of now there are 53 days until Christmas. If they haven't made it to market by now, you can pretty much count any potential iPad competitors out so far as holiday shopping is concerned.
War? What war? This is no war, this is a fucking massacre! It's like a 21st century war machine invading some territory in the 2nd century BC. Which is defended by people with sticks. Boom. Boom. Boom!
but wait until Android comes out... then <insert blah, blah Android comment here>
The Droid boys will declare it superior months before anyone even sees a live demo. Funny how they deride Mac as aficionados "macSheep", while the ads for the products they prefer promise to turn them into robots.
I guess the irony just gets lost in their circuitry.
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Originally Posted by Jetz
Not really, given the amount of energy involved in elevating a vehicle of any kind.
Ironically, some of those bleating loudest for flying cars are also demanding that everyone drive a Prius.
If the above is true, then how does it follow that there will be too much choice? There will be a tablet from each OEM (and of course in different sizes and memory/connectivity configs) but that's about it. That certainly won't be too much choice. I suspect tablets are going to be handled differently from phones. OEMs aren't going to be putting out a new tablet line-up every 6 months. Once each OEM nails down a form factor, all you'll really see are spec bumps....exactly like Apple is doing now.
As for margins, we'll see. I suspect that even Apple's margins will drop as competition heats up....albeit not to the same level as the other OEMs. And I suspect this will happen in the phone space too....just give it time. There was a long lag and no effective competition for the iPhone until Android's phenomnal rise this year. And now you have not just Android but Windows Phone 7, an upgraded Symbian and a revamped Blackberry OS nipping at the iPhone's heels. It's not too hard to command good margins when you have 95% of the market. But when you have substantially less than that? I don't think these dynamics (and by that I mean Apple's crazy margins) will hold forever....though Apple will always make tons of cash for its shareholders.
Except that the iPad is priced extremely competitively, Apple's margins notwithstanding. If Apple is getting "crazy" margins for the iPad, what are we to make of the asking price for the Tab? Has Samsung gotten greedy?
How about the iPod Touch? Not seeing a lot of small tablets selling for less. The iPhone? Yes, that's being undercut by Android handsets, but arguably because of carrier subsidies and a willingness on the part of struggling handset makers to make almost no money at all in order to drive market share. LG is losing money, Motorola is barely eking out a profit, Samsung and HTC are pretty much holding steady.
Apple can both sustain margins and undercut competitors prices because they have the iOS machine completely wired. Shared componentry, economics of vast scale, locked in bulk purchases, fine tuned supply chain, etc. And has been noted many times, they're making all the money in the segment, just sucking up the profits.
As far as the economics of scale starting to work for Android tablet makers, why couldn't Samsung seriously undercut the iPad's pricing right out of the gate? It's "just a big Galaxy S" isn't it? They make a lot of their own hardware, don't they? What's going to happen that's going to allow Samsung (or any of the subsequent Android tablet makers) to drive those prices down? The OS going to get cheaper? Those phone parts that they're already shipping by the millions going to suddenly decide to yield to market pressures brought on by modest volume increases?
What will happen is that there'll be a lot of no-name entrants with rock bottom pricing and build quality to match, which of course will be just fine with a certain segment of the market. But that will actually hurt Samsung and LG and HTC worse than it hurts Apple.
Except that the iPad is priced extremely competitively, Apple's margins notwithstanding. If Apple is getting "crazy" margins for the iPad, what are we to make of the asking price for the Tab? Has Samsung gotten greedy?
I do think Samsung's made a terrible mistake with their pricing. I suspect they just don't want to devalue their product early. But I think they'll be forced to do it once they get disappointing sales results.
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Originally Posted by addabox
How about the iPod Touch? Not seeing a lot of small tablets selling for less.
Umm...those small tablets (like the Dell Streak) are significantly larger and more capable than the iPod Touch. Samsung's newly derived media player (Galaxy S sans 3G internals) is the first true Android competitor to the iPod Touch. I think this is a growth area many Android OEMs have ignored.
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Originally Posted by addabox
The iPhone? Yes, that's being undercut by Android handsets, but arguably because of carrier subsidies...
And that's not going to get better. Forget the USA. As Android picks up in the rest of the world, I predict there's going to far less willingness by carriers to foot the Apple premium on behalf of their customers. That will drive down Apple's margins with time.
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Originally Posted by addabox
....and a willingness on the part of struggling handset makers to make almost no money at all in order to drive market share. LG is losing money, Motorola is barely eking out a profit, Samsung and HTC are pretty much holding steady.
HTC is holding steady with record profits??? Motorla is barely eking out a profit. And that's a positive after nearly being wiped out from the business altogether. I would say that's quite the turnaround. But hey, if you don't count turning around revenues by hundreds of millions of dollars as substantial, that's your call.
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Originally Posted by addabox
Apple can both sustain margins and undercut competitors prices because they have the iOS machine completely wired. Shared componentry, economics of vast scale, locked in bulk purchases, fine tuned supply chain, etc. And has been noted many times, they're making all the money in the segment, just sucking up the profits.
Again. That's a snapshot in time. What happens as competition picks up? That's the defining question. While Apple has its advantages (some of which you have pointed out) I don't necessarily agree that Apple's large (almost excessive) margins are destined to continue forever.
Consider for example, your suggestion of iOS as a strength. It is. However, that doesn't mean Android is a millstone around the OEMs necks. How much would it cost each of them to develop their own operating systems? Where would they be without Google's efforts? I would suggest that Google has saved a lot of them from outright failure, competing with Apple.
Quote:
Originally Posted by addabox
As far as the economics of scale starting to work for Android tablet makers, why couldn't Samsung seriously undercut the iPad's pricing right out of the gate? It's "just a big Galaxy S" isn't it? They make a lot of their own hardware, don't they? What's going to happen that's going to allow Samsung (or any of the subsequent Android tablet makers) to drive those prices down? The OS going to get cheaper? Those phone parts that they're already shipping by the millions going to suddenly decide to yield to market pressures brought on by modest volume increases?
Again. Agreed. I think Samsung made a mistake, which I expect they'll learn from and rectify in the next few months.
Quote:
Originally Posted by addabox
What will happen is that there'll be a lot of no-name entrants with rock bottom pricing and build quality to match, which of course will be just fine with a certain segment of the market. But that will actually hurt Samsung and LG and HTC worse than it hurts Apple.
I disagree that this low end segment hurts Samsung, LG, HTC. More like this segment would simply not exist without these cheaper options. Moreover, there's nothing stopping the larger OEMs from addressing these markets (with say 5in tablets or 4in media players like that new Samsung Galaxy S media players).
I do think Samsung's made a terrible mistake with their pricing. I suspect they just don't want to devalue their product early. But I think they'll be forced to do it once they get disappointing sales results.
And do what, take a loss on each sale?
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Umm...those small tablets (like the Dell Streak) are significantly larger and more capable than the iPod Touch.
The Streak is $549 sans subsidy, so it's also significantly more expensive. So why the huge margins?
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Samsung's newly derived media player (Galaxy S sans 3G internals) is the first true Android competitor to the iPod Touch. I think this is a growth area many Android OEMs have ignored.
How much does it cost? If it isn't significantly cheaper than than the iPod Touch, why is Samsung demanding such high margins? That's what we're talking about right, not just if someone makes something Touch like.
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And that's not going to get better. Forget the USA. As Android picks up in the rest of the world, I predict there's going to far less willingness by carriers to foot the Apple premium on behalf of their customers. That will drive down Apple's margins with time.
So how does that work, exactly? Most Android phones get cheaper and cheaper, with the end game being free on contract? And where does the money come from, again? If Samsung can't build a 7" tablet priced competitively without carrier subsidy, why do you think Android phones are such a good deal for the carriers? I think that everyone is forgoing money to grab market share, but that model isn't sustainable. I don't think Android pricing disparity will get worse, I think there'll be a shakeout with the HTCs, Samsungs, etc. trending towards "hero" phones priced similarly to the iPhone (which is what they need to charge to make a decent return) and the vanilla Android market taken over by no name Asian clones that are worth every penny of their free price.
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HTC is holding steady with record profits??? Motorla is barely eking out a profit. And that's a positive after nearly being wiped out from the business altogether. I would say that's quite the turnaround. But hey, if you don't count turning around revenues by hundreds of millions of dollars as substantial, that's your call.
If you look at the last 5 years or so HTC, Motorola, Samsung, LG are basically flat, with only HTC making modest gains. "Hundreds of millions" isn't much money in the global cell market, and it's chump change in the global CE market.
And that's with Android phones selling like gangbusters. Where's the real money? Again, how can Apple be making so much profit if their pricing is so out of line? Android's growing, but so is iOS, and massively. Why would Apple want to "compete" with a race to the bottom of no profit commodity pricing propped up by subsidies?
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Again. That's a snapshot in time. What happens as competition picks up? That's the defining question. While Apple has its advantages (some of which you have pointed out) I don't necessarily agree that Apple's large (almost excessive) margins are destined to continue forever.
How has competition not "picked up"? Android is skyrocketing. Apple is still making all the money. Android is the OS of choice of struggling handset makers, else they would have developed their own OS ala MS and RIM.
Carrier subsides completely distort the cell market. I think the tablet market is going to demonstrate just how far Apple has come with controlling costs. All 7" tablets coming to market are priced at least as much as the iPad, when unsubsidized. According to you, Apple's inflated margins should make it easy for the competition to swoop in and seize market share with sharply lower pricing, but that's not happening. Apparently because they're not actually competing yet, for some reason.
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Consider for example, your suggestion of iOS as a strength. It is. However, that doesn't mean Android is a millstone around the OEMs necks. How much would it cost each of them to develop their own operating systems? Where would they be without Google's efforts? I would suggest that Google has saved a lot of them from outright failure, competing with Apple.
Agreed, but what does that say about these manufacturers ability to continue to innovate and advance the platform? Apple is pouring money into iOS. Android is represented by a bunch of manufacturers that couldn't afford to do their own OS and grabbed onto Android as a lifeline. Does that sound like a healthy basis for improvement, going forward?
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Again. Agreed. I think Samsung made a mistake, which I expect they'll learn from and rectify in the next few months.
I'm sorry, that's absurd. Samsung knows exactly what the stakes are, and they priced the Tab as low as they figure they possibly could and make it worth their while. Downward price pressure isn't just an unlimited game, where companies can afford to give all their stuff away just to drive sales. They have to be profitable. If Samsung substantially reduces the price of the Tab, it will have to be considered a loss leader, which isn't good for Samsung or the nascent Android tablet industry. Someone has to make some money somehow, and you're stuck on the idea that whatever Apple charges must leave a lot of room to price cut, on account of their high margins. I'm arguing that their efficiencies mean they can build these things cheaper than the competition, still make their margins while undercutting pricing.
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I disagree that this low end segment hurts Samsung, LG, HTC. More like this segment would simply not exist without these cheaper options. Moreover, there's nothing stopping the larger OEMs from addressing these markets (with say 5in tablets or 4in media players like that new Samsung Galaxy S media players).
If the idea is that cheaper wins, then why wouldn't no name products that cost less than an HTC item cut into HTC's sales? You explicitly believe that that very phenomena will hurt Apple, why not everybody else?
I totally agree. While collectively Android devices will be competing against iOS devices, individually, they'll be competing against each other. What's more, they'll all be racing to the bottom, which will kill their margins, while Google will laugh all the way to the bank, because they will make money regardless. Meanwhile, the iPad will continue to turn in impressive numbers.
While people say they prefer choice, it's really not true. Too many choices is complicated and confusing. Yes, in the Android world will be able to "choose" between Motorola and Samsung and HTC and whatnot, but those choices are about as meaningful as closing your eyes and picking one at random.
Graphic designers and web designers know it's not good to show the client 50 different design options. It's best to just give them a couple or three "choices" and let them pick their favourite from those. Apple understands this, and their sales numbers bear this out.
The tried and true sales technique is for the salesman to give the potential customer 2 choices -- this does not include "yes" or "no".
If there are more than 2 choices available, the observant salesman picks the 2 the customer is likely to buy (and the salesman has available to sell):
Salesman: Do you want the 16 GB model or the 32 GB model?
Customer: I am leaning towards the 64 GB model.
Salesman: Do you want that without 3G or with 3G?
Customer: Without 3G.
Salesman: Do you want the Apple Case or the Brand X Case?
Customer: I don't need a case.
Salesman: Do you want the Standard warranty or the Extended warranty?
...
Obviously, there will be questions by the customer, intermingled -- but the salesman will always give the customer 2 "yes" choices.
... This was taught to me by a very successful shoe salesman -- and later reinforced by a very successful Apple Sales executive.
I'm arguing that their efficiencies mean they can build these things cheaper than the competition, still make their margins while undercutting pricing.
Yeah, like buying a half billion worth of flash or a half billion worth of displays or whatever in a block. Even Samsung, who makes flash, has to consider opportunity cost in terms of tablet pricing based on current flash pricing.
Just like the iPod, Apple is first to market, has the bigger share and others will try to play catch-up but never will. UNLESS, some ACTUALLY makes a better product.
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Originally Posted by Robin Huber
Like the Newton, the Pocket PC was a good idea whose time had not yet come. We had to have ubiquitous WiFi and 3G for such portable devices to have anything approaching the connectedness and usefulness of any smartphone. You could argue that developments related to the iPod and iTunes Music Store also had to be in place before any pocket computer would function well enough to be truly popular.
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Originally Posted by Postulant
In my opinion, the only other tablet worth mentioning is the HP Tablet running WebOS. I'm sure the software and hardware will integrate nicely as Apple has managed to do with its iPad.
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Originally Posted by Robin Huber
... The iPad and impending tablets with WebOS or Android are designed from the ground up to be something else--with their own advantages and disadvantages. One would never equate a laptop to a desktop, yet the distinction between mobile OSes and desktop OSes is even greater.
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Originally Posted by 0yvind
Also don't forget: Not even Adroid 3.0 is made for tablets. According to Andy Rubin (Android's main man), it's a version after 3.0 (called Honeycomb) that's built for tablets. Coming out some time in 2011...
Here are what I believe are the Apple advantages in the Tablet space:
1) first to market
2) integrated design of hardware and software
3) iTunes / store ecosystem -- including developers
4) low cost/price due to economies of scale
5) reservation of critical parts and production lines
6) Tablet specific OS features
7) Repository of sophisticated OS APIs and Frameworks
I think that the last 2 items will allow apple to dominate the tablet marketplace for the foreseeable future.
Tablet specific OS features
iOS already includes features that exploit the additional real estate of the tablet -- this gives them at least a 6-month lead time.
A simple example to illustrate this is the mail app on the iPad -- it has a 2-column display, e.g. mail headers and selected mail detail (one column and popup in portrait mode).
Android * doesn't have this! WebOS doesn't have this! I am not sure about PlayBook OS, but I doubt it!
* The Galaxy Tab has implemented this by skinning Android with system-supplied apps that imitate the apps on the iPad. There is no API or Framework in Android to do this.
Obviously, Windows 7 is capable of this, but there is no Windows 7 that is practical for a Tablet.
Repository of sophisticated OS APIs and Frameworks
Apple did not create a mobile OS from scratch -- rather they took a robust, mature, existing OS and ported it to the mobile arena.
I can't overstate the importance of this!
Apple has a single core OS that runs on all its hardware!
That means that any features on the Mac that would be desirable on a tablet -- are there for the taking (porting).
Again, here's a simple example to illustrate what I mean:
Open iTunes and display the contents of your song library or a playlist in list view. The display will show several columns that all scroll together, vertically. When you tap the header of any column, the table is sorted by that column (alternately, ascending and descending). Also, you can resize and rearrange (drag and drop) columns
No big deal, right! On an iPhone, a multi-column table doesn't make much sense -- it would be too small to read and manipulate.
What about a tablet? Could someone taking inventory in a store, or drilling-down any data use a multi-column table?
I think so!
As of today, iOS does not support multi-column tables (nor do any of the other mobile OSes).
When Apple implemented the single-column table on the iPhone, it did not implement it from scratch -- rather, it subsetted and ported the NSTableView from Mac OS X to become UITableView.
If Apple decides (or developers insist) that a more robust multi-column table view makes sense in iOS -- it already has working code that it can port at any time.
There are several ways Apple could do this. I suspect they will re-implement NSTableView to run on iOS, then migrate it back to the Mac OS X Mothership.
Apple (and NeXT, before it) has been working for many, many years to implement features like this in Mac OS X.
No other Mobile OS has this repository!
No other Desktop OS has a Mobile OS version to which it can port,
No one but Apple has a single SDK for both desktop and mobile.
By the time the competition has this capability, Apple will have a uOS (Universal OS in Sol's words) that runs seamlessly on all its real devices and cloud devices.
BTW, a multi-colmun table might be useful navigating, say, an AppleTV. How about someone browsing for files on a tablet file system?
Windows Tablets are real tablets and been around for years. They also have full desktop OS, which we've been told over and over are much better tablet than the iPad with its iPhone OS (iOS now)
Well I know you are being sarcastic but Tablets in general have never done well. Before the iPad on average they would only account for 2-4% of the market. So they never did well.
Which pre release is why I didn't think the iPad would do all that well.
Comments
Where is Microsoft's tablet? where is Google's tablet? etc etc etc.....
They're coming, bet on it. If something is successful and can be copied they will do it. Although it will likely be only the OS that they'll make, leaving the hardware to anyone.
As a matter of fact, Steve Ballmer predicted that Portable Handheld devices would one day overtake PCs. That was back in 2000.
Actually, Capt. Kirk and Dick Tracy kind of beat him to the punch. That's one of those predictions that anyone can make. I predict that in the future personal transportation that flies will overtake that which rolls on rubber tires on concrete pathways. (Kind of inevitable don't you think?)
In my opinion, the only other tablet worth mentioning is the HP Tablet running WebOS. I'm sure the software and hardware will integrate nicely as Apple has managed to do with its iPad.
I am going to suggest that the RIM Playbook might actually do pretty well. Simple because of name recognition more than anything else.
Actually, Capt. Kirk and Dick Tracy kind of beat him to the punch. That's one of those predictions that anyone can make. I predict that in the future personal transportation that flies will overtake that which rolls on rubber tires on concrete pathways. (Kind of inevitable don't you think?)
Not really, given the amount of energy involved in elevating a vehicle of any kind. But your point stands. :-)
That, rather than "the tablet market is heating up" or "tablet sales are up" or any of that. The iPad was a new kind of device that caught the incumbents napping, it's had the "tablet market" (as that term now must be defined) to itself up till now, and whatever variations in that market have to be attributed to the iPad itself, not some imaginary larger context where the iPad's fortunes must be compared to nearly imaginary devices.
What part of that 26% rise in "tablet sales" was accounted for by the iPad? Do the math: Apple sold 3.27 million in the quarter the article sites as having 3.5 million tablet sales total, all but 230,000. Against 4.19 million iPads and 4.4 million total tablets this quarter, or all but 210, 000. In other words, the non-iPad segment of the "tablet market" is actually shrinking, and from this we are to understand that the "tablet wars are up and running"?
Right, but MS had "Pocket PC" a mobile OS that was available in 2000, where is it now? What mobile device is using a modern version of that mobile OS?
Dozens of phones use it. Verizon sells at least a couple.
I totally agree. While collectively Android devices will be competing against iOS devices, individually, they'll be competing against each other. What's more, they'll all be racing to the bottom, which will kill their margins, while Google will laugh all the way to the bank, because they will make money regardless. Meanwhile, the iPad will continue to turn in impressive numbers.
While people say they prefer choice, it's really not true. Too many choices is complicated and confusing. Yes, in the Android world will be able to "choose" between Motorola and Samsung and HTC and whatnot, but those choices are about as meaningful as closing your eyes and picking one at random.
If the above is true, then how does it follow that there will be too much choice? There will be a tablet from each OEM (and of course in different sizes and memory/connectivity configs) but that's about it. That certainly won't be too much choice. I suspect tablets are going to be handled differently from phones. OEMs aren't going to be putting out a new tablet line-up every 6 months. Once each OEM nails down a form factor, all you'll really see are spec bumps....exactly like Apple is doing now.
As for margins, we'll see. I suspect that even Apple's margins will drop as competition heats up....albeit not to the same level as the other OEMs. And I suspect this will happen in the phone space too....just give it time. There was a long lag and no effective competition for the iPhone until Android's phenomnal rise this year. And now you have not just Android but Windows Phone 7, an upgraded Symbian and a revamped Blackberry OS nipping at the iPhone's heels. It's not too hard to command good margins when you have 95% of the market. But when you have substantially less than that? I don't think these dynamics (and by that I mean Apple's crazy margins) will hold forever....though Apple will always make tons of cash for its shareholders.
but wait until Android comes out... then <insert blah, blah Android comment here>
The Droid boys will declare it superior months before anyone even sees a live demo. Funny how they deride Mac as aficionados "macSheep", while the ads for the products they prefer promise to turn them into robots.
I guess the irony just gets lost in their circuitry.
Not really, given the amount of energy involved in elevating a vehicle of any kind.
Ironically, some of those bleating loudest for flying cars are also demanding that everyone drive a Prius.
If the above is true, then how does it follow that there will be too much choice? There will be a tablet from each OEM (and of course in different sizes and memory/connectivity configs) but that's about it. That certainly won't be too much choice. I suspect tablets are going to be handled differently from phones. OEMs aren't going to be putting out a new tablet line-up every 6 months. Once each OEM nails down a form factor, all you'll really see are spec bumps....exactly like Apple is doing now.
As for margins, we'll see. I suspect that even Apple's margins will drop as competition heats up....albeit not to the same level as the other OEMs. And I suspect this will happen in the phone space too....just give it time. There was a long lag and no effective competition for the iPhone until Android's phenomnal rise this year. And now you have not just Android but Windows Phone 7, an upgraded Symbian and a revamped Blackberry OS nipping at the iPhone's heels. It's not too hard to command good margins when you have 95% of the market. But when you have substantially less than that? I don't think these dynamics (and by that I mean Apple's crazy margins) will hold forever....though Apple will always make tons of cash for its shareholders.
Except that the iPad is priced extremely competitively, Apple's margins notwithstanding. If Apple is getting "crazy" margins for the iPad, what are we to make of the asking price for the Tab? Has Samsung gotten greedy?
How about the iPod Touch? Not seeing a lot of small tablets selling for less. The iPhone? Yes, that's being undercut by Android handsets, but arguably because of carrier subsidies and a willingness on the part of struggling handset makers to make almost no money at all in order to drive market share. LG is losing money, Motorola is barely eking out a profit, Samsung and HTC are pretty much holding steady.
Apple can both sustain margins and undercut competitors prices because they have the iOS machine completely wired. Shared componentry, economics of vast scale, locked in bulk purchases, fine tuned supply chain, etc. And has been noted many times, they're making all the money in the segment, just sucking up the profits.
As far as the economics of scale starting to work for Android tablet makers, why couldn't Samsung seriously undercut the iPad's pricing right out of the gate? It's "just a big Galaxy S" isn't it? They make a lot of their own hardware, don't they? What's going to happen that's going to allow Samsung (or any of the subsequent Android tablet makers) to drive those prices down? The OS going to get cheaper? Those phone parts that they're already shipping by the millions going to suddenly decide to yield to market pressures brought on by modest volume increases?
What will happen is that there'll be a lot of no-name entrants with rock bottom pricing and build quality to match, which of course will be just fine with a certain segment of the market. But that will actually hurt Samsung and LG and HTC worse than it hurts Apple.
Except that the iPad is priced extremely competitively, Apple's margins notwithstanding. If Apple is getting "crazy" margins for the iPad, what are we to make of the asking price for the Tab? Has Samsung gotten greedy?
I do think Samsung's made a terrible mistake with their pricing. I suspect they just don't want to devalue their product early. But I think they'll be forced to do it once they get disappointing sales results.
How about the iPod Touch? Not seeing a lot of small tablets selling for less.
Umm...those small tablets (like the Dell Streak) are significantly larger and more capable than the iPod Touch. Samsung's newly derived media player (Galaxy S sans 3G internals) is the first true Android competitor to the iPod Touch. I think this is a growth area many Android OEMs have ignored.
The iPhone? Yes, that's being undercut by Android handsets, but arguably because of carrier subsidies...
And that's not going to get better. Forget the USA. As Android picks up in the rest of the world, I predict there's going to far less willingness by carriers to foot the Apple premium on behalf of their customers. That will drive down Apple's margins with time.
....and a willingness on the part of struggling handset makers to make almost no money at all in order to drive market share. LG is losing money, Motorola is barely eking out a profit, Samsung and HTC are pretty much holding steady.
HTC is holding steady with record profits??? Motorla is barely eking out a profit. And that's a positive after nearly being wiped out from the business altogether. I would say that's quite the turnaround. But hey, if you don't count turning around revenues by hundreds of millions of dollars as substantial, that's your call.
Apple can both sustain margins and undercut competitors prices because they have the iOS machine completely wired. Shared componentry, economics of vast scale, locked in bulk purchases, fine tuned supply chain, etc. And has been noted many times, they're making all the money in the segment, just sucking up the profits.
Again. That's a snapshot in time. What happens as competition picks up? That's the defining question. While Apple has its advantages (some of which you have pointed out) I don't necessarily agree that Apple's large (almost excessive) margins are destined to continue forever.
Consider for example, your suggestion of iOS as a strength. It is. However, that doesn't mean Android is a millstone around the OEMs necks. How much would it cost each of them to develop their own operating systems? Where would they be without Google's efforts? I would suggest that Google has saved a lot of them from outright failure, competing with Apple.
As far as the economics of scale starting to work for Android tablet makers, why couldn't Samsung seriously undercut the iPad's pricing right out of the gate? It's "just a big Galaxy S" isn't it? They make a lot of their own hardware, don't they? What's going to happen that's going to allow Samsung (or any of the subsequent Android tablet makers) to drive those prices down? The OS going to get cheaper? Those phone parts that they're already shipping by the millions going to suddenly decide to yield to market pressures brought on by modest volume increases?
Again. Agreed. I think Samsung made a mistake, which I expect they'll learn from and rectify in the next few months.
What will happen is that there'll be a lot of no-name entrants with rock bottom pricing and build quality to match, which of course will be just fine with a certain segment of the market. But that will actually hurt Samsung and LG and HTC worse than it hurts Apple.
I disagree that this low end segment hurts Samsung, LG, HTC. More like this segment would simply not exist without these cheaper options. Moreover, there's nothing stopping the larger OEMs from addressing these markets (with say 5in tablets or 4in media players like that new Samsung Galaxy S media players).
I do think Samsung's made a terrible mistake with their pricing. I suspect they just don't want to devalue their product early. But I think they'll be forced to do it once they get disappointing sales results.
And do what, take a loss on each sale?
Umm...those small tablets (like the Dell Streak) are significantly larger and more capable than the iPod Touch.
The Streak is $549 sans subsidy, so it's also significantly more expensive. So why the huge margins?
Samsung's newly derived media player (Galaxy S sans 3G internals) is the first true Android competitor to the iPod Touch. I think this is a growth area many Android OEMs have ignored.
How much does it cost? If it isn't significantly cheaper than than the iPod Touch, why is Samsung demanding such high margins? That's what we're talking about right, not just if someone makes something Touch like.
And that's not going to get better. Forget the USA. As Android picks up in the rest of the world, I predict there's going to far less willingness by carriers to foot the Apple premium on behalf of their customers. That will drive down Apple's margins with time.
So how does that work, exactly? Most Android phones get cheaper and cheaper, with the end game being free on contract? And where does the money come from, again? If Samsung can't build a 7" tablet priced competitively without carrier subsidy, why do you think Android phones are such a good deal for the carriers? I think that everyone is forgoing money to grab market share, but that model isn't sustainable. I don't think Android pricing disparity will get worse, I think there'll be a shakeout with the HTCs, Samsungs, etc. trending towards "hero" phones priced similarly to the iPhone (which is what they need to charge to make a decent return) and the vanilla Android market taken over by no name Asian clones that are worth every penny of their free price.
HTC is holding steady with record profits??? Motorla is barely eking out a profit. And that's a positive after nearly being wiped out from the business altogether. I would say that's quite the turnaround. But hey, if you don't count turning around revenues by hundreds of millions of dollars as substantial, that's your call.
If you look at the last 5 years or so HTC, Motorola, Samsung, LG are basically flat, with only HTC making modest gains. "Hundreds of millions" isn't much money in the global cell market, and it's chump change in the global CE market.
And that's with Android phones selling like gangbusters. Where's the real money? Again, how can Apple be making so much profit if their pricing is so out of line? Android's growing, but so is iOS, and massively. Why would Apple want to "compete" with a race to the bottom of no profit commodity pricing propped up by subsidies?
Again. That's a snapshot in time. What happens as competition picks up? That's the defining question. While Apple has its advantages (some of which you have pointed out) I don't necessarily agree that Apple's large (almost excessive) margins are destined to continue forever.
How has competition not "picked up"? Android is skyrocketing. Apple is still making all the money. Android is the OS of choice of struggling handset makers, else they would have developed their own OS ala MS and RIM.
Carrier subsides completely distort the cell market. I think the tablet market is going to demonstrate just how far Apple has come with controlling costs. All 7" tablets coming to market are priced at least as much as the iPad, when unsubsidized. According to you, Apple's inflated margins should make it easy for the competition to swoop in and seize market share with sharply lower pricing, but that's not happening. Apparently because they're not actually competing yet, for some reason.
Consider for example, your suggestion of iOS as a strength. It is. However, that doesn't mean Android is a millstone around the OEMs necks. How much would it cost each of them to develop their own operating systems? Where would they be without Google's efforts? I would suggest that Google has saved a lot of them from outright failure, competing with Apple.
Agreed, but what does that say about these manufacturers ability to continue to innovate and advance the platform? Apple is pouring money into iOS. Android is represented by a bunch of manufacturers that couldn't afford to do their own OS and grabbed onto Android as a lifeline. Does that sound like a healthy basis for improvement, going forward?
Again. Agreed. I think Samsung made a mistake, which I expect they'll learn from and rectify in the next few months.
I'm sorry, that's absurd. Samsung knows exactly what the stakes are, and they priced the Tab as low as they figure they possibly could and make it worth their while. Downward price pressure isn't just an unlimited game, where companies can afford to give all their stuff away just to drive sales. They have to be profitable. If Samsung substantially reduces the price of the Tab, it will have to be considered a loss leader, which isn't good for Samsung or the nascent Android tablet industry. Someone has to make some money somehow, and you're stuck on the idea that whatever Apple charges must leave a lot of room to price cut, on account of their high margins. I'm arguing that their efficiencies mean they can build these things cheaper than the competition, still make their margins while undercutting pricing.
I disagree that this low end segment hurts Samsung, LG, HTC. More like this segment would simply not exist without these cheaper options. Moreover, there's nothing stopping the larger OEMs from addressing these markets (with say 5in tablets or 4in media players like that new Samsung Galaxy S media players).
If the idea is that cheaper wins, then why wouldn't no name products that cost less than an HTC item cut into HTC's sales? You explicitly believe that that very phenomena will hurt Apple, why not everybody else?
I totally agree. While collectively Android devices will be competing against iOS devices, individually, they'll be competing against each other. What's more, they'll all be racing to the bottom, which will kill their margins, while Google will laugh all the way to the bank, because they will make money regardless. Meanwhile, the iPad will continue to turn in impressive numbers.
While people say they prefer choice, it's really not true. Too many choices is complicated and confusing. Yes, in the Android world will be able to "choose" between Motorola and Samsung and HTC and whatnot, but those choices are about as meaningful as closing your eyes and picking one at random.
Graphic designers and web designers know it's not good to show the client 50 different design options. It's best to just give them a couple or three "choices" and let them pick their favourite from those. Apple understands this, and their sales numbers bear this out.
The tried and true sales technique is for the salesman to give the potential customer 2 choices -- this does not include "yes" or "no".
If there are more than 2 choices available, the observant salesman picks the 2 the customer is likely to buy (and the salesman has available to sell):
Salesman: Do you want the 16 GB model or the 32 GB model?
Customer: I am leaning towards the 64 GB model.
Salesman: Do you want that without 3G or with 3G?
Customer: Without 3G.
Salesman: Do you want the Apple Case or the Brand X Case?
Customer: I don't need a case.
Salesman: Do you want the Standard warranty or the Extended warranty?
...
Obviously, there will be questions by the customer, intermingled -- but the salesman will always give the customer 2 "yes" choices.
... This was taught to me by a very successful shoe salesman -- and later reinforced by a very successful Apple Sales executive.
... Do you prefer something in brown or black...
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I'm arguing that their efficiencies mean they can build these things cheaper than the competition, still make their margins while undercutting pricing.
Yeah, like buying a half billion worth of flash or a half billion worth of displays or whatever in a block. Even Samsung, who makes flash, has to consider opportunity cost in terms of tablet pricing based on current flash pricing.
Just like the iPod, Apple is first to market, has the bigger share and others will try to play catch-up but never will. UNLESS, some ACTUALLY makes a better product.
Like the Newton, the Pocket PC was a good idea whose time had not yet come. We had to have ubiquitous WiFi and 3G for such portable devices to have anything approaching the connectedness and usefulness of any smartphone. You could argue that developments related to the iPod and iTunes Music Store also had to be in place before any pocket computer would function well enough to be truly popular.
In my opinion, the only other tablet worth mentioning is the HP Tablet running WebOS. I'm sure the software and hardware will integrate nicely as Apple has managed to do with its iPad.
... The iPad and impending tablets with WebOS or Android are designed from the ground up to be something else--with their own advantages and disadvantages. One would never equate a laptop to a desktop, yet the distinction between mobile OSes and desktop OSes is even greater.
Also don't forget: Not even Adroid 3.0 is made for tablets. According to Andy Rubin (Android's main man), it's a version after 3.0 (called Honeycomb) that's built for tablets. Coming out some time in 2011...
Here are what I believe are the Apple advantages in the Tablet space:
1) first to market
2) integrated design of hardware and software
3) iTunes / store ecosystem -- including developers
4) low cost/price due to economies of scale
5) reservation of critical parts and production lines
6) Tablet specific OS features
7) Repository of sophisticated OS APIs and Frameworks
I think that the last 2 items will allow apple to dominate the tablet marketplace for the foreseeable future.
Tablet specific OS features
iOS already includes features that exploit the additional real estate of the tablet -- this gives them at least a 6-month lead time.
A simple example to illustrate this is the mail app on the iPad -- it has a 2-column display, e.g. mail headers and selected mail detail (one column and popup in portrait mode).
Android * doesn't have this! WebOS doesn't have this! I am not sure about PlayBook OS, but I doubt it!
* The Galaxy Tab has implemented this by skinning Android with system-supplied apps that imitate the apps on the iPad. There is no API or Framework in Android to do this.
Obviously, Windows 7 is capable of this, but there is no Windows 7 that is practical for a Tablet.
Repository of sophisticated OS APIs and Frameworks
Apple did not create a mobile OS from scratch -- rather they took a robust, mature, existing OS and ported it to the mobile arena.
I can't overstate the importance of this!
Apple has a single core OS that runs on all its hardware!
That means that any features on the Mac that would be desirable on a tablet -- are there for the taking (porting).
Again, here's a simple example to illustrate what I mean:
Open iTunes and display the contents of your song library or a playlist in list view. The display will show several columns that all scroll together, vertically. When you tap the header of any column, the table is sorted by that column (alternately, ascending and descending). Also, you can resize and rearrange (drag and drop) columns
No big deal, right! On an iPhone, a multi-column table doesn't make much sense -- it would be too small to read and manipulate.
What about a tablet? Could someone taking inventory in a store, or drilling-down any data use a multi-column table?
I think so!
As of today, iOS does not support multi-column tables (nor do any of the other mobile OSes).
When Apple implemented the single-column table on the iPhone, it did not implement it from scratch -- rather, it subsetted and ported the NSTableView from Mac OS X to become UITableView.
If Apple decides (or developers insist) that a more robust multi-column table view makes sense in iOS -- it already has working code that it can port at any time.
There are several ways Apple could do this. I suspect they will re-implement NSTableView to run on iOS, then migrate it back to the Mac OS X Mothership.
Apple (and NeXT, before it) has been working for many, many years to implement features like this in Mac OS X.
No other Mobile OS has this repository!
No other Desktop OS has a Mobile OS version to which it can port,
No one but Apple has a single SDK for both desktop and mobile.
By the time the competition has this capability, Apple will have a uOS (Universal OS in Sol's words) that runs seamlessly on all its real devices and cloud devices.
BTW, a multi-colmun table might be useful navigating, say, an AppleTV. How about someone browsing for files on a tablet file system?
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A lot of the announced stuff looks promising. But as of now, nothing really interesting has hit the market.
There really isn't anything interesting. The HP Slate I am shocked they released that version with Windows installed at that price point.
Windows Tablets are real tablets and been around for years. They also have full desktop OS, which we've been told over and over are much better tablet than the iPad with its iPhone OS (iOS now)
Well I know you are being sarcastic but Tablets in general have never done well. Before the iPad on average they would only account for 2-4% of the market. So they never did well.
Which pre release is why I didn't think the iPad would do all that well.