Monday, May 2, 2011

My Quick Thoughts on the Tablet Market

Apple had dominated the Tablet arena since it released the iPad back in April of 2010. When it hit the market, the only things it had going for it were the company behind it and an ecosystem that had worked for the iPad's electronic cousins (iPhone, iPod Touch and iPod devices). Very few people believed there was a market for a "go-between" device that did the same things that a smartphone, laptop or desktop did already.

It was released with a very small number of optimized apps and an software developer's kit (SDK) that hoped to produce more. Of course it did have tons of iPhone apps that could be used on day one, but they looks horribly wrong in its iPhone size in the middle of the huge iPad screen and looked even worse when forced to fit the whole screen with the 2x button.

Behind these iPhone apps were an army of developers that was eager to get their hands on the SDK and venture into this new land of the tablet world. In less than a year, these developers would produce over 65,000 iPad optimized apps; many that were reworked versions of their iPhone apps, but some were brand new apps that took advantage of the huge screen and portability of the device. Apple had proven that their was a huge demand for a device that is a "go-betweener" between the smartphone and the traditional computer. They had step into a technology land of milk and honey and now everyone wanted to get a taste of the promise land of tablet sales.

Around the same time these things were happening, Google's Android operating system was appearing on many smartphones and these Android phones were beginning to challenge Apple iPhone dominance in the Smartphone arena. With Motorola's huge marketing pocket, there were not many people who had not heard of a Droid. The Droid became the poster child for the Android smartphone campaign. Whether Motorola liked it or not, it had helped usher in the likes of Samsung and others into the Android smartphone market. Palm who? HP had purchased Palm Inc and its WebOS even though the Palm Pre smartphone had not done as well as they had hoped.

Finally people felt that they had alternatives to the iPhone and more importantly a choice. See the iPhone was exclusive to AT&T and many that were interested in the iPhone, passed because they were not interested in AT&T. Because the Android operating system was offered on all the carriers' networks. Even amongst the bottom feeders of the cellular world, like MetroPCS, Android would gain a growing market share in the mobile arena.

So it was established that people liked smart technologies, choice of carriers and even a tablet computer (regardless of analysts' and critics' opinions). This scenario creates fertile ground for the growth of this new tablet arena and as a result, there is no shortage of companies seeking to do so.

So the market has began to receive its share of tablets or promises of future tablets. The first year for the tablet had ended, April 3, 2011 marked the birthday of the first year of iPad sales. A year ago Apple began selling the popular device and was the only tablet in town (unless you count Windows tablets - my boss has a Dell Windows tablet that looks like a laptop on her desk - it has never been used as a tablet since I set it up for her 3 years ago). With the introduction of the iPad 2, Apple has increased it dominance of the new market. Of course when people speak of a tablet, they are really speaking of an iPad 99.9% of the time. That is good for Apple. It makes the emergence of competing tablet a little more difficult because someone has to carry the "acceptance" flag to the average person about the new tablets.

If a potential customers talks to someone at a non-Apple store, the store personnel will most likely have the iPad as a reference point for the foreseeable future. Being first is huge. Any awareness or discussion of this "new" market most likely will not be done without the awareness or mentioning of Apple. Every time a new tablet is introduced or mentioned, it will be compared to the iPad. This discussion helps Apple whether the talk is positive or negative.

The iPad has had a great first year. The iPad 2 has already out paced the sale of the original iPad sales; although Apple has not released any official iPad 2 sales numbers.

Why are they successful? Apple has an appeal that media and techies either love or hate. Love and Hate are both great for Apple. Let's talk about the emotional aspects for a minute; the things we love or hate are the things we discuss. The things that we are indifferent about are the things that we rarely discuss. There is no indifference for the iPad. A tablet-like product that may have had its share of indifference towards it is the Dell Streak 5. The iPad does not provoke such indifference or silence.

Both the opponents and the proponents are vocal, very vocal. The Windows fanboys hate everything about Apple and their products. You can find them on all the discussion boards and any site that mentions Apple and have a comment tool. They can't wait until a new Apple product is discussed so they can talk junk about it. Not because they used it and don't like it, but because Apple made it. The Apple fanboys do the same, except with positive "can do no wrong" rants. My mom always said, "if you can't say anything good, then don't say anything at all". She never took a marketing class. You want people talking about your products; the good, the bad and all without ceasing. So the first reason Apple is successful is that Apple is good at getting people to talk about their products,

The second things is that they have good products. Not perfect products, but rather good products. They decided that the mass of the population is their target audience, not the much smaller techie crowd. Their latest iPad 2 commercial "We Believe" is proof of what they believe: usability is more important than technical specifications. See the techies will find something to complain about with any and all devices because no one device is or ever be perfect. You can't please everyone with one soda, one restaurant, one automobile, one woman, one man, or one job - so why do so many people think a single device will accomplish this? What one device can do; however, is demand more attention or more acceptance. Apple is achieving both.

What Apple is also achieving is more brand awareness that will result in more interest in their other products like MacBook Air, MacBook Pro, iMac and others products like Apple TV.

Of course, the tablet market is hot right now, and Apple's lead is quite troubling for the competitors. The concern, from the competition, is that Apple could "iPod" the market, meaning that Apple could end up being the dominant player in tablets, as it has been in mobile MP3 players.

Apple's competitors can match it feature-for-feature or even excel at the hardware level, but Apple's real magic is in the software and services it ties to its devices. But its advantage actually goes even deeper. Apple controls the hardware, software, services and ecosystem that it ultimately delivers to its customers. It makes money before and after the sale of its products. With the release of the Mac App Store, this system is now expanded to the desktop.

The vendors don't want to hear this, but owning the hardware, software, and services is key to competing against Apple. The problem is that for most of them, they have lived under a model in which Microsoft delivered the OS and they delivered the hardware and they had to merely differentiate at the hardware level. They had little control over the software and, at least in the PC business to date, had little interest or skill sets for developing their own service level to extend the points of differentiation.

But if Apple is the gold standard for success in tablets, then trying to own as much of the hardware, software and services may be a key strategy needed by any competitor if they hope to challenge Apple. And it means doing things they are not used to or even comfortable doing, since it means controlling the cloud back-end, front-end, and the overall user experience.

Both Samsung and Motorola has begun to offer some sort of media center to offer products, but it is currently a drop in the bucket. Samsung has the most experience in this arena, as they are doing app stores in other products like home theater systems and Smart TVs. Their tablets, set to launch in the US in the summer, will be the closes thing resembling the iPad - so much so that Apple is suing them because of the similarities.

HP purchased Palm Inc and hopes to create their own ecosystem to compete with iPad. The WebOS software is promising and the knowledge that Palm brings in invaluable to HP, but can HP deliver? Their WebOS powered TouchPad is scheduled for release in the summer of 2011 as well. The Touchpad tablet is missing a rear-facing camera; a standard feature in this very competitive new market. I am not sure why they would exclude this, though they could add it before the release date. I liked what the WebOS offered in the Smartphone arena; however, I must admit that the Palm Pre smartphone never felt quite right for me when I used it as my primary phone device.

The screen was too small, the keyboard was too small and the operating system seemed sluggish. I also had a generation one Apple iPod Touch at the time, so the Palm Pre could contain my full attention. Admittingly, I still use the Palm Pre today. It serves as my bedside companion: for alarm clock duties, Pandora Radio and Stitcher Radio listening. I do very little email managing, web surfing or YouTube video watching from it. So clearly, I like what the WebOS device can do; just not happy with the size. Whether the size was the root of all the problems that they Palm Pre suffered from, I cannot say, but I hope that a larger size, faster processor, more memory and improved OS is enough to give the HP TouchPad a fighting chance.

I didn't buy the iPad 2, because it didn't have enough changes to warrant trying to sell the iPad 1. When it is time to upgrade my iPad 1, in about a year, I just hope that the tablet manufacturers have learned more from Apple and offer me some compelling choices; otherwise I will most likely purchase the iPad 3.



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