The iPad Killer Report: Is There a Way Forward?

May 10th, 2012

Last winter, the Apple haters were delighted to learn that Amazon appeared to have a winner on their hands with the Kindle Fire tablet. That 7-inch gadget sold for a “mere” $200, and evidently did pretty well over the holiday season, with reported sales of several million units. Well, at least that’s what the industry analysts said since, of course, Amazon never discloses unit sales of hardware in their quarterly financials. I suppose sales were to be inferred by sampling dealer sell-throughs, or by examining Amazon’s earnings. But since many of those Kindles are sold directly, the results are little more than educated or not-so-educated guesses.

Indeed, if you can believe those reports, the Fire took control of more than half the otherwise stagnant Android tablet market. Sure, Amazon puts their own face on the Fire, so it’s not obviously Android, but that still counts as support for the platform.

In any case, sales of the Fire appeared to have collapsed after the holidays, although the lesser figures are also estimates. Regardless, it’s reported that Apple now has a 68% share of the tablet market, which puts that in a similar tier as the iPod.

So where does that leave the tablet makers, or is this just another iPod in the making? It’s a good question, and you can bet Apple’s competitors are just scared to death over that prospect. Buying an iPad doesn’t’ necessarily mean a customer is just buying another device to sit beside their PC. They may not buy another PC, or Mac, now or ever. Indeed, more and more iPad users have found that they can use it as their one and only personal computer. Sure, maybe they need an accessory keyboard — and I grant that’s an awkward setup — but the iPad’s screen is otherwise not so different in physical size from early compact Macs and Mac portables. It’s not so bad a place to do your work as more and more productivity apps appear.

With iPhoto for the iPad, in fact, I’d be willing to suggest that tweaking your family’s photo album is a lot more fun than on a Mac. That doesn’t mean Adobe should release a full featured version of Photoshop for the platform. For now, you have Adobe Photoshop Express, available free (except for optional in-app enhancements). But there’s also Adobe Photoshop Touch, which, at $9.99, offers a respectable number of features that indicate a potential if not a realization that a lot more is possible.

Because Apple makes so many iPads, economy of scale takes over. Apple is able to get the parts they need for less than the competition, and I don’t think any other company is able to get LCD panels that would come close to the new iPad’s Retina Display. So Apple can sell the iPad at a fair price yet make a good profit. At this point, mainstream Android tablets are priced about the same, and the cheaper ones are sold with little or no profit, or with features removed. The Kindle Fire, for example, has no camera, and strikes many as bare bones. It was also sold at cost or at a small loss.

So the Android tablet makers are being forced to fight for bottom feeder products at the lowest price possible, almost in the same way traditional PC makers have flooded the market with cheap junk. They aren’t profit-making machines, and thus manufacturers will have little incentive to differentiate them very much, except for minor differences in screen size or hardware specs. Besides, there’s no proven tablet app ecosystem outside of the iOS App Store. Apple has 200,000 apps optimized for the iPad. What about the rest, or can you just count them on the fingers of your hand, or maybe the toes?

Some suggest that Microsoft will be the savior for companies who want to compete with an iPad. Sure, Microsoft has been touting the arrival of the tablet for over a decade with few takers. But a Windows 8 tablet will offer the same interface, Metro, as a regular PC running the Intel version of that OS. Sure, you’ll only be able to run apps optimized for ARM processors — except for hefty and expensive Intel-based tablets that never succeeded — so potential customers may be few and far between.

I realize Microsoft will want to stoke the development process with some cash, but that doesn’t mean you’ll soon see a flood of serious apps to rival the iPad. Microsoft may be put in the traditional position of offering less with a new product, and promising more later. But the competition, particularly Apple, won’t be standing still.

So maybe, if Android tablets continue to fail, the industry will pin their hopes and dreams on Microsoft and Windows 8. But it’s not that Windows Phone handsets, featuring the same interface, have shown any potential for success. Sure, Microsoft still has roughly 90% of the traditional PC OS market. Windows 8 may do decently simply because consumers will get the OS with a new PC. If Microsoft makes Windows 8 upgrade pricing affordable, maybe they’ll do well there too. But the business market will remain highly skeptical.

To be perfectly realistic, I don’t dispute the possibility that another company can beat Apple at their own game with a superior tablet and a better OS, one that’ll tempt developers seeking an alternative. But that’s just a possibility, not a reality. For many potential Apple rivals, it may already be too late to beat the iPad unless Apple really screws up.

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3 Responses to “The iPad Killer Report: Is There a Way Forward?”

  1. Microsoft will have to give developers an incentive to flood its tablets with apps that can rival those being sold at the iOS App Store. Otherwise, Apple will keep a tight reign over the tablet market.

  2. DaveD says:

    What Apple has done is to disrupt the traditional PC/Mac market with the iPhone, iPod touch & iPad. The smartphone market have blossomed. Don’t see any iPod touch copycat devices and where have all the last year’s iPad wannabees gone?

    While the “droid” smartphones are doing well by copying the iPhone, Apple is doing very well in the higher end of the market raking in a lot of money. Why? It is about the Apple’s total user experience from the beauty/quality of the devices and the ease-of-use to content delivery (apps, music, movies, TV shows, e-books, etc.) to the high-rated service and support.

    I don’t doubt that the PC makers and Microsoft are worried about the ascension of the iPad as Apple maintains the annual schedule in putting out the next generation. I have to believe that a majority of PC users have a traditional computer mostly for Internet use. For now, the Mac market is growing from those who want a traditional computer that are fleeing from Windows. Expect to see more when Windows 8 hit the market later this year.

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