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Why the Tablet Market is Really the iPad Market 657

Posted by samzenpus
from the price-war-has-started dept.
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.'"
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Why the Tablet Market is Really the iPad Market

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  • by AmiMoJo (196126) <mojo@@@world3...net> on Thursday August 02, 2012 @06:53PM (#40862379) Homepage

    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.

    • Re: (Score:3, Interesting)

      by camperdave (969942)
      Onenote? What about Onenote? Get me firefox, mplayer, onenote, and an ereader on a tablet with bluetooth, wifi, decent battery, and stylus capabilities, and I'll pay real money for it. If it is sunlight readable, I'd pay double.
      • by Anonymous Coward on Thursday August 02, 2012 @07:13PM (#40862585)

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

        This is what you sound like.

      • Re: (Score:3, Funny)

        by aaronb1138 (2035478)

        Exactly why I picked up a HP Slate 500 for $350 when I got the chance. Few people understand what a killer app OneNote is.

        I eagerly await the Surface Pro. It will be THE game changer in the corporate world, if not a significant segment of the consumer one. I can't help but laugh my ass off at every person with a functioning laptop or tablet, who is so woefully ignorant as to buy an ultrabook, Macbook Air, or iPad 3 since the Surface Pro was announced.

      • Onenote? What about Onenote?

        OneNote is quite possibly the only Microsoft app to date that runs on both iOS and Android.

        Actually, no, scratch that. The other one is Lync client.

        • OneNote for Android (and iPhone) appears to be missing the main feature that made it so great on Tablet PC, which was pen input and handwriting recognition.

          • by shutdown -p now (807394) on Friday August 03, 2012 @12:10AM (#40864587) Journal

            Well, admittedly, no iOS and few Android devices actually have digitizers, which is what you need for this to be workable with capacitive touch. It worked great on Tablet PCs because those almost exclusively used resistive touchscreens, sucky for fingers but great with a stylus. For Android, the only device with a digitizer I can think off the bat is Lenovo Thinkpad Tablet.

            OneNote on Win8 will definitely support pen input, though, so that might be interesting. And IIRC not only Surface has a digitizer, but so do a bunch of third-party tablets as well, like Asus ones.

            • by ozmanjusri (601766) <aussie_bob@NOsPam.hotmail.com> on Friday August 03, 2012 @12:22AM (#40864651) Journal

              For Android, the only device with a digitizer I can think off the bat is Lenovo Thinkpad Tablet.

              As well as the Samsung Galaxy Note, Asus Padphone, HTC Flyer and the millions of inexpensive tablets/phones supplied with capacitative foam-tipped styluses.

              • As well as the Samsung Galaxy Note, Asus Padphone, HTC Flyer and the millions of inexpensive tablets/phones supplied with capacitative foam-tipped styluses.

                There is a huge difference between a plain capacitive stylus, and a true digitizer - the former is much less precise, and practically useless for handwriting at length.

    • Re: (Score:3, Informative)

      by redemtionboy (890616)

      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.

      • by Anonymous Coward on Thursday August 02, 2012 @07:16PM (#40862601)

        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.

        • Re: (Score:3, Interesting)

          by Anonymous Coward

          I highly doubt Google's so interested in their profit margin on the devices themselves. They give away Android for free, more or less. They're more interested in getting money off of the content and ads, where any lack of profit is going to be made back up (especially their major baby of the ads that is the heart of their money).

        • by macs4all (973270) on Thursday August 02, 2012 @10:44PM (#40864171)

          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.

          If Apple is making 50% margin on the iPad, then why has no one else been able to come close to the specs for even 25% less money?

      • by jmorris42 (1458) * <`jmorris' `at' `beau.org'> on Thursday August 02, 2012 @08:23PM (#40863163)

        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?

        • by oakgrove (845019) on Thursday August 02, 2012 @09:03PM (#40863495)
          Exactly. I went to CompUSA and spied a 7 inch Android tablet running 4.0. Of a cheap tablet running ICS got my attention but I still assumed it would be trash. Boy was I surprised when I swiped the screen and it was perfectly smooth and obviously capacitive. I played around with it for a few and was floored by how much you could get for...99 dollars. I even took a picture and emailed it to my sister in law for her kids.
          • by ozmanjusri (601766) <aussie_bob@NOsPam.hotmail.com> on Thursday August 02, 2012 @09:58PM (#40863865) Journal

            Yep, we've been loading Novo 7 Tornados [aliexpress.com] 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...

            • by Fjandr (66656) on Friday August 03, 2012 @12:24AM (#40864663) Homepage Journal

              This is one killer application I have yet to see gain traction, but I think it's inevitable. Personally, the only considerable use I'd give to a tablet myself would be for quick and easy access to reference material. The ease of accessing information from digital documentation is on par or superior to print in almost every respect. The only downside of note is the ability to flip-browse through a large bound printed volume to find a place cue, and the benefits of digital searching alone far outweigh that drawback on balance.

              I see cheap(er) tablets beginning to gain a prevalence in applications where quick access to otherwise cumbersome reference documentation would be a serious boon. They could have an absolutely staggering effect on productivity if equipped and deployed sanely.

        • by steveha (103154) on Thursday August 02, 2012 @09:08PM (#40863527) Homepage

          So why do [tablets] cost so much more?

          Because Apple enjoys making a 40% margin [forbes.com] 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

    • Re: (Score:3, Interesting)

      by Anonymous Coward

      The Nexus 7 looks cool, but what I really wanted was the canceled Microsoft Courier [gizmodo.com]. A dual screen paperback book form-factor with hand-writing recognition. Something I could easily hold in one hand and take notes with, or browse the web with, or compose emails with. If Microsoft had made the Courier, it would own the enterprise tablet market, and possibly the college kid market.

      • Two problems I could imagine having with the Courier (if it existed) or similar style tablet...

        1) Weight. I have a Galaxy Tab 10.1 and it weighs 565g / 1.25 lb (quite a bit lighter than the iPad) which is weighty enough that it can become a little uncomfortable holding it unsupported in the same position for too long, especially one handed and in landscape orientation. The Courier would have had two screens and to power them, maybe a bigger battery too. I'd guess that thing would be closer to 900g / 2 lb wh

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      Apple fanbois are getting nervous? Hardly.

      The iPad is the best tablet for ME. I was into Apple products well before they were popular, because they were better suited to ME. As long as Apple survives as a company and supports my iPad, I'm happy. If Apple is #15 - who cares? I'll still use their products until something better comes along.

      Better to me is definately not specs like CPU, memory, gigahertz, etc..... It's the SOFTWARE, OS and ECOSYSTEM that makes Apple products so much better. Other competitors a

      • Re: (Score:3, Insightful)

        by BronsCon (927697)

        There is no big 'conspiracy' why Apple products are winning...

        Apple products are winning?

        ...shoving 'specs' out is not how you win the Tablet game....

        Oh, you're referring to tablets, good, because there are more Android phones out there than there are iPhones; Samsung, alone, sells twice as many Android phones as Apple does iPhones.

        ...Apple knows what most people want, Android does not.

        Apple knows what Apple fans want; by and far, in the iOS vs. Android war you seem to think is being fought, people want Android, by sales numbers. Further, Android doesn't know what anyone wants, but Google's apparently got a decent idea, as do Morotola, HP, Acer, Archos, Sony, HTC, LG, Amazon, Bar

        • by PyroMosh (287149) on Friday August 03, 2012 @12:24AM (#40864659) Homepage

          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 [wikipedia.org]

          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/ [techcrunch.com]

          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.

        • by Savage-Rabbit (308260) on Friday August 03, 2012 @03:18AM (#40865329)

          ...shoving 'specs' out is not how you win the Tablet game....

          Oh, you're referring to tablets, good, because there are more Android phones out there than there are iPhones; Samsung, alone, sells twice as many Android phones as Apple does iPhones.

          That's kind of what this thread is all about... tablets. Don't skin him alive over staying on topic.

          ...Apple knows what most people want, Android does not.

          Apple knows what Apple fans want; by and far, in the iOS vs. Android war you seem to think is being fought, people want Android, by sales numbers. Further, Android doesn't know what anyone wants, but Google's apparently got a decent idea, as do Morotola, HP, Acer, Archos, Sony, HTC, LG, Amazon, Barnes & Noble, and Samsung. By and far, these companies outsell Apple and it's not because Apple knows better than they do what their customers want.

          So everybody who buys Apple products is an evil Apple fanboy? A poor unfortunate and unenlightened heretic who has not seen fit to convert too the true religion which is Google Androidsimn? After all it couldn't possibly be that some random consumer who's never thought about Apple or Microsoft as heretical religious organisations would go out and buy their products simply because they like them and not because they have been 'evangelized'. You really need to learn to relax. People buy what they like, end of story. Sometimes they buy Apple devices sometimes they buy Android devices and sometimes (Ghasp!) they even buy Microsoft devices because that's the product they like.

    • by WarlockD (623872) on Thursday August 02, 2012 @07:16PM (#40862603)

      Thats not the point of the article. Its because Google and Amazon are subsidizing the cost of their tablets so much that the consumers are expecting other manufactures to do so. Apple can get away with it because of their market presence and the idea that they are a quality product.

      Your right, the Nexus 7 will explode the tablet market but who OTHER than google/Amazon can subsidize the price point to 200 bucks? This is why Dell and other manufacture companies jumped ship. The OEM's sell hardware for a profit, they cannot compete with companies that don't care about the hardware cost when they make up for it on content distribution.

      Hell, this is why Microsoft is giving the finger to all the OEM's when it comes to their tablet. They will either have to subsidize the tablet to make it a "cheaper" alternative OR spend the time (years) to keep it on the market and compete with Apple directly on features and not on price.

      If you want a real example of this, look at the US Cell Phone market. People EXPECT free phones with a contract or pay just a little more for a higher quality phone. However, if you look at Japan or Europe, those same phones are bought at full price for cheaper service.

      • Re: (Score:3, Informative)

        by pointybits (818856)

        Thats not the point of the article. Its because Google and Amazon are subsidizing the cost of their tablets so much that the consumers are expecting other manufactures to do so.

        Google aren't subsidizing anything at these prices. According to Forbes, "The $199 Nexus 7 8 GB variant costs exactly $151.75 to build while the $249 Nexus 7 16 GB variant costs $159.25. This implies gross margins of nearly 25% to 35% for the device, which are closer to what Apple makes on each iPad." Apple's gross margin on the "new iPad" is around 20%.

        • by ceoyoyo (59147) on Thursday August 02, 2012 @08:04PM (#40862995)

          Others have estimated that the iPad costs around $375 to make, and sells for $729. That's a wee bit more than 20%.

          So either Apple is committing massive fraud by not reporting more than half their profits, the manufacturing cost estimates are bull, or there are a few things you have to do to design, build and market a tablet other than build it.

          If the extra costs are around 30% per device then Google IS going to have to subsidize the Nexus 7. If the extra costs are actually fixed in dollars, in whole or in part, then Google is going to have to subsidize the Nexus 7 even more.

          It seems very likely that Google is subsidizing the Nexus 7 since it's similar to the Fire, at the same price point, and the Fire is almost certainly subsidized.

    • by chrb (1083577) on Thursday August 02, 2012 @07:23PM (#40862643)
      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? [theinquirer.net] 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 [consultantvalueadded.com] and revenue from associated mobile services like calls etc. is also about $1 trillion).

      • by grcumb (781340)

        From the article:

        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? [theinquirer.net] 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?

        Agreed. It's stupid of the article's author to make a comparison between tablet and PC price wars, because in practical terms, all PCs were indistinguishable to the purchaser. They all just ran Windows, and they only had to be good enough to run Windows. The minority who actually cared about performance paid more for their kit and the rest just bought the cheapest PC they could find.

        In other words, the PC industry went to shit because Windows ran like shit anyway (for the majority), so why waste money?

        iOS,

    • by American AC in Paris (230456) on Thursday August 02, 2012 @07:25PM (#40862659) Homepage

      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

    • by Paul Slocum (598127) on Thursday August 02, 2012 @07:27PM (#40862677) Homepage Journal
      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 [facebook.com]
      • by oakgrove (845019) on Thursday August 02, 2012 @08:47PM (#40863369)
        Have you considered the possibility that this guy's app is poorly coded? You only have to go down the first few reviews before you find ones complaining about the latency. The app right now is $2.53 so I downloaded it and tested it out. Sure enough there is a pronounced delay between touching the screen and hearing the sound. 1/5 of a second sounds about right on my Motorola Xoom. I got a refund within the 15 minutes and decided for reference to try out a random highly rated piano keyboard app. The latency on the piano app was significanly less than on WaveSynth. I don't know what your guys problem is but blaming his failings on Android when other developers seem to be able to handle the job is a bit weak.
    • by MobileTatsu-NJG (946591) on Thursday August 02, 2012 @07:38PM (#40862739)

      Apple fanbois are getting nervous.

      I don't see why. Every time Apple gets a kick in the butt their devices get new features. I seriously doubt we'd have the Notification Center right now if it weren't for Android. Even an Apple fan would have to see that.

      • I agree.

        Besides, what's there to be nervous about? Nobody takes my Apple gear away if an Android device has a good quarter. Most Apple users and fans couldn't possibly care less about other devices. That's why they have Apple hardware.

      • by SEE (7681)

        The trick is there are two types of "Apple fans"

        One group is fans of Apple products. They would like, if at all possible, to get Apple products with even better features are even lower prices. They want Apple to be healthy so it can keep cranking out great products, but when they look at Apple's profit margin and pile of cash, they wish some of that money had stayed in their own pockets. When Samsung makes a product that puts pressure on Apple, or Google adds a feature to Android, they see that as a forc

    • by shutdown -p now (807394) on Thursday August 02, 2012 @08:09PM (#40863041) Journal

      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.

      No-one knows how much exactly Surface will cost, but all signs point at it being at least not any cheaper than the "equivalent" (i.e. same storage size) iPad. And the main attraction that it offers is certainly not casual web browsing & ebook reading, but rather the ability to run full-fledged Windows apps when you need to, especially Office - which is why it comes with that keyboard cover in the first place. So it's pretty much the exact opposite of what you claim.

  • by Anonymous Coward on Thursday August 02, 2012 @06:58PM (#40862421)

    It's actually GOOD. Before the iPad was announced, people were speculating that it would cost $1000, and they thought that was a great price. But then it was introduced at $500. For $500, you get a device you saw on Star Trek 20 years ago... and it is a joy to use.

    • Re: (Score:3, Insightful)

      by jaymz666 (34050)

      at 500 bucks it's still too expensive. It's the same price as a good windows laptop.

  • by crankyspice (63953) on Thursday August 02, 2012 @07:06PM (#40862517)

    [C]umulative 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 . . .

    Hmm. “50% of people with a tablet have an iPad. That doesn't sound so bad until you consider that previously that number had been more like 72%. The slack was taken up by Amazon's Kindle Fire, which has jumped from zero to a 22% share of the market since it launced in fall 2011 . . . "We expect to see the iPad as the leader, but with the Surface, Kindle Fire, and Nexus as three solid competitors with significant market share..."” iPad losing tablet market share [latimes.com] (July 31, 2012).

    • by ceoyoyo (59147) on Thursday August 02, 2012 @08:14PM (#40863087)

      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.

      • by jmorris42 (1458) *

        > Apple seems to know that marketshare doesn't matter so long as you're still raking in money

        And so long as they get beat back into their historical 10% niche of customers willing to pay a super premium for a brand experience I'll be happy for em.

        Because that will mean the other 90% of us can happily ignore their overpriced stuff.

        But ya know what? Apple fanbois are about the only fans I know of who make how much money their object of lust is hoovering out of their wallet a selling point when preaching t

  • by Anonymous Coward on Thursday August 02, 2012 @07:07PM (#40862529)

    go look at meritline.com, dealextreme.com, and chinavasion.com: search for 'android' without specifying tablet

    Look at how many devices you get, in how many different formfactors, with how many different featuresets.

    They have GPS tablets now for under 100 bucks, some even have 3d acceleration.
    They have PSP style game consoles 75-150 bucks.
    They have tablets with and without hdmi-out, with and without capacitive touch, with and without bluetooth 55-300+ dollars.

    Point? There's plenty of innovation going on in the tablet market, it's not stopped by price, and if you look at the specs in some of the 'cheap' devices, you'll see that you're getting performance comparable to the last generation 'high end' devices with perhaps lower build quality, screen size, or accessories, but some people are willing to trade that in order to be able to play the latest wiz-bang game on it.

    The tablet market is just getting started and anybody who thinks otherwise likely also thinks America is the only country that can innovate.

  • Bullpucky. (Score:5, Insightful)

    by drinkypoo (153816) <martin.espinoza@gmail.com> on Thursday August 02, 2012 @07:09PM (#40862545) Homepage Journal

    '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.

  • Innovation again ? (Score:4, Interesting)

    by obarthelemy (160321) on Thursday August 02, 2012 @07:19PM (#40862613)

    I'm tired of the "innovation" motto. Very little innovation is needed, and whatever is actually need barely qualifies as innovation: better screens and batteries, standard ports.. and, mainly, developpers, developpers, developpers.

    Non-iPad tablets are failing because they are priced at the premium level of the iPad but are not really premium, at least not in customers' perception. As in any segment, competitors need to differentiate. Price is one criteria, as are openness, interoperability, features, quality, performance, brand..

    Plus I'm not sure non-iPads are failing. Not all of them. They're not the free money some OEMs fantasized about, but I'm sure they're making some money for a few select ones.

  • by markdavis (642305) on Thursday August 02, 2012 @07:39PM (#40862753)

    Kendrick is just wrong.

    * There is a HUGE market for people that are not willing to pay $400 to $500 for a tablet.

    * Android now has more apps in Google Play than Apple's marketplace (granted, not as many tablet optimized ones).

    * Android now has a MUCH larger market penetration than iPhones.

    * Android has some HUGE players behind it now.

    * What held Android tablets back was the lack of OS tweaks for tablet functionality. FIXED. And quality tablet models. FIXED. And low enough priced alternatives to the iPad. FIXED.

    People can continue to pretend that Apple will remain in control of the tablet market for many years to come, but those are likely the same people that thought Android could not bump Apple into a distance second place in the smart phone market.

    Apple is not going to be able to dismiss Android anymore, regardless of how much they sue everyone. Lower priced Android tablets are going to create a whole new market and Apple is going to have a very hard time competing in that world.

    • Re: (Score:3, Insightful)

      by aaronb1138 (2035478)

      It's called the Apple cycle [google.com] for a reason....

      I'm thinking about taking some spare cash and putting a ridiculous short option on Apple stock for the next 12-18 months. Only part that makes it high risk is the capricious nature of jurists in Apples' many lawsuits and their currently health cash reserves. Might be 24-36 months until we are looking at the desperate Apple of the 90's again, but it will happen.

    • by Swampash (1131503)

      * There is a HUGE market for people that are not willing to pay $400 to $500 for a tablet.

      Strangely enough, the most valuable publicly-traded company in the world did not get to that position by focusing its business model on poor people.

  • by Dan East (318230) on Thursday August 02, 2012 @07:42PM (#40862785) Homepage Journal

    It's not that simple at all. PCs, regardless of the manufacturer, all ran the same software. What you saw onscreen (besides maybe an OEM desktop picture) was EXACTLY the same. Only the hardware was different, and that was usually just a matter of case style. iPad has massive, thriving, 3rd party development going on, and it is directly coupled to the iPhone ecosystem. The two reinforce each other in a major way. So comparing the battle between PC OEMs to tablet manufacturers against iPad is not a valid comparison.

    The real question the article should be asking is "could the iPad be the success it is today without the iPhone having existed first?" Instead they ask "But if price is such an important metric, why is the iPad — with its premium price tag — so popular?" and then answer it dead wrong "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."

    WHY did it go "mass market"? THAT is the real question. What they discuss is like asking "Why does the iPad have so many sales?" and then answering "because Apple sells a lot of them".

  • It's a Veblen good (Score:5, Insightful)

    by Intropy (2009018) on Thursday August 02, 2012 @07:44PM (#40862817)

    "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.

    • by jmorris42 (1458) * <`jmorris' `at' `beau.org'> on Thursday August 02, 2012 @08:54PM (#40863429)

      Think you have it. The big clue is that almost every iPhone cover has an opening for the logo. Almost no cover for an Android phone does that. That says that displaying the logo is considered to be very important. To be seen with it might not be as important has actually having it, but it certainly seems to be A factor in the buying decision process.

    • 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.

      Normally the typical Slashdot poster demonstrates a lack of understand of the mass market appeal of a product by claiming that a device needs more tricks and do-dads that only a hardcore geek would want but this? Now this demonstrates an entirely different lack of understanding.

      Sorry, but the mass market hasn't accepted the iPad because it's expensive. A very small number of rich users may have bought one as a toy because it makes their penis feel larger but when about 85 million people have bought one, you

  • by ShanghaiBill (739463) on Thursday August 02, 2012 @07:45PM (#40862819)

    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.

  • by frist (1441971) on Thursday August 02, 2012 @08:32PM (#40863241)

    Background: Not an apple fanboi. Owned no apple products other than a $1500 used Mac Lisa that VPI forced the CS class to buy back in the day because they had a version of Uniplus Sys V for it...

    I've owned C64, Amigas, now a bunch of PCs that have various versions of Windows and Linux starting with Windows 3.1 and Linux 1.0 (4 floppies for a distro, I miss that).

    I went to the store to look at the Transformer and some other android tablets after checking out a friend's. All the Android tablets were so-so. I'd have to sideload Netflix on most of them. The displays were ok. They had an apple section so I said "what the heck, let me check out this iPad thing".

    Looked at an iPad (3rd gen, retina display). Wow. It just worked so well, the display was unbelievable. Everything was super smooth. Reading docs on it was amazing. It made the Android tabs look terrible. There was just no comparison. I went back over to the Android tabs and gave them another shot. There was just no going back anymore.

    I bought a 3rd gen iPad, came back for a 2nd for the kids the next day. I tried an iPad 2 for the kids, no good, 1024x768, could not use it after using the retina display (2048x1535), so exchanged that one for a 2nd new 3rd gen iPad. Definitely worth the extra $150.

    I keep an eye on the Android tablets, They're starting to come out with 1920x1080 res devices now, still no comparison.

    I borrowed a mac mini to try out Xcode (you have to develop iOS aps on a mac). I had tried the android SDK, not too impressed, and the nightmare of managing all the different platforms is no fun (I have to do that at work). I actually liked OS X. Nothing like the crappy OS 9 and prior. A BSD-based desktop OS - imagine that. A Linux-like desktop that is actually good.

    I've been eyeing the Macbook Pro w/retina display... 2880x1800 in a 15" package. To run Windows and Linux because I have to.

    If I could extricate myself from the Windows / Linux ecosystem that I write software for I would, but I can't, too many PCs, too many ties. I have to write windows and linux software. Windows 8 holds nothing for me, current distros of linux are going in the wrong direction with their insane UIs (activities? really?). But OS X is nice. Too bad the mac desktop/laptop hardware is so expensive and limited, and I can't use a phone w/out a slider keyboard.

    But for the tablet experience, I wouldn't trade the retina display iPads for any android tablets. There's just no comparison.

  • by aristotle-dude (626586) on Thursday August 02, 2012 @10:06PM (#40863899)

    As an actual software developer with over a decade of actual "work" experience, I can tell you that the best specs in the world don't mean shit if the platform you are running on is not optimized to run on the hardware and if the API for third party developer does not give you access to all of that power.

    Optimization is extremely important on mobile platforms where battery life is a limited quantity and the end user expect to run unplugged for an extended period of time.

    The reason why iOS on the tablet is so popular is that Apple developed a unique set of controls for the iPad form factor from the first release of the iPad OS and they also provided an easy way to have "universal" apps that target both phones and tablets.

    The other major reasons are the power of the API and Apple's promotion of paid apps. At first, Google did not give a rat's arse about whether developers could make money on Android because Google is an advertising company at heart. They view the users as the "product" that they sell to advertisers. They really don't care about you at all unless if they see you start leaving their platform. Privacy is seen as a nuisance at Google which gets in the way of making money for them.

    In a nutshell, users of Android devices and developers are seen as a means to an end rather than customers and partners.

  • by 787style (816008) on Friday August 03, 2012 @01:46AM (#40864941)
    People fully expected the ipad to have a $1000 price tag upon its release, and blew away expectations with it's price point. Why is it a premium?
  • nope (Score:4, Insightful)

    by Tom (822) on Friday August 03, 2012 @05:05AM (#40865779) Homepage Journal

    why is the iPad so popular? Simple, it was the first tablet to go mass market,

    No, you idiot, that is not only not the reason, it's also wrong. There have been many, many attempts at the tablet market before, many of whom were intended and manufactured for the mass market, except that the market left them on the shelves.

    The iPad is so popular because it simply works. Your little kid can pick it up and use it. And your grandma. And your uncle John who hasn't seen a computer since he was sent to prison 12 years ago.

    Also, it has a cool factor.

    It's not the first. It's just the first that actually works. And it still offers more than all the competitors. Not necessarily "more" in the geek categories nobody really cares about (memory, CPU power and other stuff that you can spend an hour explaining to your non-geek friends), but more in the categories that matter to normal people. And that's why they're still being bought as fast as they roll off the production lines.

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