Tablets for Christmas
I remember a Christmas in the late 90s where it seemed like everybody got a mobile phone. This year it’s looking like we’re going to see the tablet equivalent, so I thought I’d do a quick round up of what I’m expecting to see.
The home front
If I include my in-laws then there will be at least three Nexus 7 devices coming for (or before) Christmas. My wife was quite taken by the advertising for the Kindle Fire HD, but when my brother showed her his Nexus 7 she was sold on the Google alternative. I was personally something of a Nexus 7 sceptic when it launched, feeling that the lack of memory and 3G options made it weaker than my existing (original) Galaxy Tab, but both of those issues have now been fixed.
For the kids
I got an email from a friend this morning saying he was getting iPad minis for his two daughters (and asking if that made him an Android traitor). This makes sense to me, as iOS still has the lead on games, which is one of the main things that kids use these devices for. I’ve got my own daughter one of the new iPod Touches for exactly the same reason.
Differentiation and market sizing
The iPad has had a good run as the main attraction in the tablet marketplace, but I see this coming to an end. I expect the iOS ecosystem to continue differentiation in two ways:
- As a premium product, in the same way that Macs were during the PC era. It’s clear that Apple is still going for a marketing based approach to the devices themselves, with a line up that starts with the iPod Touch, and goes up in size via the iPad Mini to the full size iPad. There’s still big margin in each of these. Google and Amazon on the other hand are going with very thin margins on the devices, so any price differentiation in the line up comes pretty much straight from the bill of materials. This will likely be the area where Apple will continue to differentiate in the long term.
- As the preferred gaming platform. Developers in general will go where the numbers are, and whilst iOS has had the lead on sales it’s also been the develop for first platform for games. This is less of an issue for many (older or first time) tablet users who just want to surf the web and read emails and ebooks, but remains a big deal for people that want games, particularly if they’ve already bought a bunch of stuff in the AppStore.
The contrast between the Apple approach and Google/Amazon is on device premium. Apple (at least for now) get to make money on the device and on the rent payer they get in the AppStore, whilst Google and Amazon are clearly willing to give up the device premium to attract rent to their ecosystems. This almost certainly plays out as Android having a major growth spurt into 2013, and it’s then only a matter of time before the balance tilts for gaming etc.
What about Microsoft?
The Surface looks like (yet another) brave try, but the reviews I’m reading suggest that it’s too expensive and the software’s too flaky to justify the price tag. If this really is MS showing their OEMs how it’s supposed to be done then I’m not expecting too much from the rest of the field.
The wider tablet with keyboard category looks to me like a well intentioned attempt to close the gap between tablets and laptops from a functional perspective, but it’s important to look at how people spend their time. If 90% is consumption of content and 9% is curation of content then that leaves the creation gap at 1%, and 1% does not a healthy market segment make.
This Christmas is going to be the turning point for Android based tablets, and the gaming and enterprise markets will need to react accordingly in the New Year. Apple is going to have a great Christmas too, as they get to double dip by making money on devices as well as content. I fear a bad New Year hangover for MS and anybody getting a product from their stable over the holiday season.
 I had previously suggested that the Nexus 7 might be a better choice than the Kindle Fire HD, but holding one in your hand can make all the difference. In practice the differentiation is less about the devices and more about whether you want a shopping cart from Jeff Bezos or Larry Page parked in front of you.
 I use my Galaxy Tab a lot on the train when in the UK, and it’s often my main source of connectivity when I’m in the US (courtesy of the AT&T SIM that came with it) so 3G connectivity is pretty important to me. If I was buying something for myself this Christmas then it would be a 3G version of the Nexus 7. I’m not buying because although the Nexus 7 is all three of better/faster/cheaper the original Galaxy Tab is still perfectly adequate for my needs. There might be some important inferences here for tablet upgrade cycles.
 He has been an Android smartphone user since the early days, and more recently got himself an ePad Transformer tablet.
 Intel seem to have labelled this ‘Ultrabook Convertible’, though it’s not clear to me that there’s a rigorous base specification for this like there is with the Ultrabook branding. I’ve seen at least 6 different physical approaches illustrated, which suggests to me that nobody has yet figured out what customers actually want.
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Tags: amazon, android, Christmas, convertible, Fire, google, HD, iPad, kindle, Microsoft, Nexus 7, Surface, tablet, ultrabook