The iPad Killer Window of Opportunity Shortens
September 24th, 2010As regular readers know, the first of an expected large group of tablet-based gadgets are beginning to go on sale. These are the supposed iPad killers that will, some suggest, seriously erode Apple’s market share in the tablet market.
That assumes, of course, that any of these products are actually any good and properly marketed, and that’s saying a lot.
You see, there’s the unfortunate assumption, proven wrong over and over again, that Apple has gained ascendency in various segments with smoke and mirrors and clever marketing. A real tech company will ultimately do them in, a repetition of the Mac versus Windows wars of long ago.
Certainly, Apple is on a roll, selling far more iPads than any supposedly knowledgeable tech analyst dared to predict. Even as I write this, more and more countries are getting iPad shipments. Here in the U.S., additional dealers will be carrying them. Apple has also claimed that the iPad is being tested by many of the largest firms on the planet.
The problem with the supposed competition that’s been announced so far is that they do not present a superior interface or hardware configuration. Yes, there’s that Samsung 7-inch tablet with front and rear cameras. But having those cameras doesn’t mean they will take good pictures, or that the software is clean and elegant. Far too many consumer electronics makers believe that adding a feature your competition doesn’t have proves superiority. They don’t realize that Apple doesn’t always put all the eggs in one basket, nor will a new product have every conceivable feature.
Sure, Apple obviously wants you to upgrade to the newer versions, so they add improvements. But it’s not at all clear that features are withheld just to provide upgrade paths. Certainly the various iOS upgrades were free to iPhone users, yet lots of features were regularly added. It is very possible that Apple just wants to make sure everything works properly before the upgrade is released — not when it’s too late.
As to the iPad, it’s also clear Apple worked hard to keep the price down, and maybe the bean counters and designers decided that there was either not enough time to add cameras, or the cost of the raw materials was a little too high. Larger production quotas will clearly change that equation, and nobody is betting that iPad 2.0 won’t have one or more built-in cameras, and perhaps even a direct USB slot for easier connection of peripherals.
More to the point, Samsung, certainly a credible company when it comes to building smartphones, flat panel TVs and Blu-ray players, has yet to demonstrate any skill in creating the personal computer of the 21st century. The first entry, the Galaxy Tab, will reportedly be sold primarily with two-year 3G data plans through major wireless carriers. Sure the price of admission is apt to be reasonable, and it’s estimated at $300. But the tablet sans contract may cost as much as $1,000, which kills the potential to compete with the iPad on any reasonable basis.
So is it possible that Apple is better able to build affordable gear than Samsung? As you know, some of the parts used in various Apple products, including displays, are sourced at Samsung? What a strange turn of events.
More to the point, just what sort of operating system will the Samsung Galaxy Tab use? Well, published reports indicate it’s Android, and that Samsung is working to modify the open source OS so that it will yield better results on a larger screen.
All well and good, but what experience does Samsung have in developing a tablet or PC-based operating system, even if the underlying code on which it’s built comes from another company? Apple has been in this game since the 1970s. Yes, I realize Samsung has lots of brilliant engineers on the payroll, but believing that a full-fledged OS for a modern tablet computer can spring forth simply by throwing money and people at the problem is unrealistic.
There’s also a published report that Dell hopes to sell their tablet for 30% less than Samsung, which is still far more expensive than the iPad, if you don’t consider a possible data plan.
Has Dell demonstrated any affinity for building good products beyond their core cheap PC and server gear? Yes, Dell makes perfectly fine displays, but the underlying parts are sourced from the same manufacturers used by Apple and other companies. Where’s the innovation? Oh, right, Dell doesn’t innovate. They just sell — or try to sell — boxes cheaper than the competition, with the same features.
Yes, there is always room for a better mousetrap and, if marketed properly, there’s no question that a tablet PC superior to the iPad can get a good share of the market. But the iPad has already become an icon, in the best tradition of the iPod, so the window of opportunity for the competition is closing fast. It may not be too late, but any hopes of substantially displacing the iPad at least for the next few years are slim to none.
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As with smart phones, it makes only a limited amount of sense to compare Apple’s gizmo per se against rival gizmos. Like the iPad, the iPhone is only the front end of an ecosystem consisting of a repertoire of apps, books, videos, and tunes (the Apple Store) and a delivery system (iTunes). You really have to evaluate the entire package, and I think that’s what savvy consumers do, and will continue to do in the future. Okay, let’s suppose Dell, for example, could manage to bring out a cheaper tablet, even a reasonably good and reliable one. How exactly would it take on Apple’s entire ecosystem when it has none of its own to offer? Apple’s only serious rivals are the corporations which have competing ecosystems to offer, or at least which could assemble one based on the bits and pieces they already have, meaning, in essence, only Amazon and Google. Amazon has books and music, and it has a good delivery system for these. But that’s only part of what Apple has to offer. If Google got in bed with Droid it could probably market a tablet, so it could deliver books and apps, but what about video and music? And of course, we all know how problematic the Droid platform is becoming because of the fragmentation issue. Throw tablets into the picture and that would only get worse. Well, you can solve pretty much any problem if you are willing to throw enough money at it, I suppose, but how much business sense would it make to have to run so hard to catch up with Apple’s robust ecosystem and the iPad, which, by the time a serious rival ecosystem could be constructed, would have had maybe 18 mos. or two years to consolidate its near-monopoly on the tablet market? This is why, a couple of days ago, I suggested that it makes no sense to try to take on the iPad head-to-head. But it might make better sense to biuld cheaper limited-function tablets designed for specialized markets, such as K-12 education.
@dfs, “Well, you can solve pretty much any problem if you are willing to throw enough money at it . . .”
I think Microsoft has proved that’s not always true.
Let the competitors do as they will, but they’re likely to just spin their wheels.
Most of the headlines during the last two months has been how Android is really catching up to the iPhone, yet a more impressive story that isn’t receiving nearly as much attention is this:
“Apple holds only around a 2.5 percent share of the entire mobile phone market, but it’s grabbing nearly a 40 percent share of overall industry profits.
Read more: http://news.cnet.com/8301-13579_3-20017282-37.html?#ixzz10SoK0klB“
Apple definitely learned something from the Newton disaster. The early handwriting recognition, which was at the core of the product, wasn’t very good. By the time Apple improved it, the jokes were already widespread. They spent a lot of time and effort on getting the nucleus of the iPhone and iPad, the multi-touch, the animations, the keyboards working. They built what my architect called “a building with good bones”. Maybe you can’t afford the garage or finished basement yet, but you won’t have to replace the roof, deal with drainage problems or wish you had built facing south after all. You can add all kinds of things to a good software platform.
That’s one of the big problems in software. What are the base components, and what are the add ons. The users generally think in terms of the add ons, like a word processor, a first person shooter or an accounting system. Early computer systems just ran the program, and the programmer had to deal with just about everything. Nowadays, no programmer is going to write his or her own keyboard hardware interface the way they did for VisiCalc in 1979. In may ways the hardware is less important than ever, but the firmware, operating system and various libraries are much more important. Look at how Apple jumped from a RISC processor to an x86 without missing a beat. Look at how long it has taken screen resolution independence to seep into the software base. If you release your software libraries in the “wrong” order as is likely when you do it too quickly, it can take forever to change course.
I always say that Steve Jobs is a software guy in a hardware guy’s body.
The shareholders of 3rd companies like, Dell, Samsung, Google, etc. expect their companies to make an effort. So they will, and they will fail. The talking point about Apple moving product because it is some kind of trendy accessory maker has always been nonsense; Apple succeeds now because their products work extremely well and people have begun to notice.
@Kaleberg
I still have my Newton but haven’t used it in ages. Was a good product for its time, but media ridicule, its high cost, difficulty in programming for it and Apple’s problems at the time that required more attention are what killed the Newton. Apple learned from that in the development of the iPod line, the iPhone and the iPad.
Remember that Apple has changed platforms multiple times. Mac 68K processors to PowerPC to Intel x86 as well as the original MacOS to OSX and the creation of iOS from a subset of OSX to make programming easier for iOS devices and to complement OSX programming knowledge.
@Tom B said “Apple succeeds now because their products work extremely well and people have begun to notice.”
Apple has ALWAYS tried to make a quality product that worked well, although not every product was a quality product. The entire Apple // series was very good, expanding and improving over the series lifetime. The original Apple /// had manufacturing flaws that were fixed with the Apple ///+, but the /// competed with the Macintosh and was killed. The Lisa was the fore-runner of the Macintosh and was needed to get the experience necessary to change course with the Macintosh and each Lisa was able to be converted into a Macintosh XL. Various Mac models had issues, ranging from a too heavy first Mac portable to the Cube that had manufacturing flaws in the plastic case.
Differences of course are that Apple makes the whole widget, rather than just being an assembler of various building blocks. Apple has an architects vision whereas others are reading builders blueprints but don’t know the underlying creativity to design the structure.
I think Apple succeeds because Steve Jobs views Apple products as quality works of art rather than commodity products. Apple wants a good return on their investment and will price it accordingly, but they no longer need to price it obscenely like in the 80’s, that was a different management. With economies of scale, Apple can make very good profits while still pricing their products competitively versus the competition.
Right now, Apple has everything needed to stay in front:
Second wealthiest company in the world based on market cap.
Massive cash reserve.
Extreme customer loyalty.
Rapidly growing global retail chain.
High-quality products.
Excellent customer service.
iTMS and 160 million credit card holders.
Innovation.
The willingness to take risks (or what appears to be risks for most companies).
Mature iOS ecosystem.
And finally, “the take charge CEO” himself, Steve Jobs.
I doubt if there’s any other tech company in the world that has all these abilities to move products like Apple can. This didn’t just happen overnight. Google will be hard-pressed to take on iTMS with content. I doubt if Android tablets can be built and sold for a lower cost having the same build quality as the iPad. Apple isn’t too large a company to be unable to make quick changes, yet it’s large enough to have huge financial clout.
If anyone can point out a tech company that has all these qualities, let me know.
@iphonerulez,
You forgot the most important one, I think:
Unrivaled expertise in hardware, software, and the integration thereof.
No other company in the universe can make this claim. All the others are either hardware or software specialists.