Hello! And welcome to our Friday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
With the holidays now just around the corner, I figured I would take a quick look into the market that seems to be the Teddy Ruxpin of this year’s consumer electronics market: tablets.
Let me just say up front that, unlike with Teddy Ruxpin, I still don’t get tablets. I know that people who have them think they cannot possibly operate without these electronic slabs, but for the life of me I can’t think of what these devices would bring to my life except column fodder.
With that out of the way, I would now like to analyze the tablet market. I figure the opening remark will remove all liability that I really know what I am talking about on this topic and thus frees me to work outside the lines on this analysis.
Analysts have been for months proclaiming that the market for tablet devices is/will/has to explode to the point where every living thing with at least one opposable digit will own at least one of these devices. Fair enough. I can only assume that these analysts are smart people working with complex models that can accurately forecast such things.
There are also an increasing number of prognostications that the tablet market will slowly begin to move in favor of those devices powered by code other than that from Apple. Again, fair enough, as it would seem that with so many more devices coming to market running something other than Apple’s operating system, this would eventually lead to such a claim coming true.
However, my take on all of this is that until those “non-Apple” devices slash what they are charging for such devices by at least one-third, and more likely one-half, Apple will continue to rule the tablet world. I know this is not some breakthrough finding, but it does seem to be something that those non-Apple device makers have yet to grasp.
Look at the smartphone market where Android-powered devices are beginning to take market leadership from Apple. Much of that growth has come from devices that carriers have begun to sell at price points significantly lower than Apple’s products. (I tend to discount the discounting of previous generation iPhone devices in this analysis as I don’t think people are really going into stores looking to purchase last year’s iPhone. Some might, and recent numbers have shown that discounted iPhones are selling pretty well, but I am guessing that number is low.)
It’s the same with the personal computer market. While I don’t track that market closely, it does seem from what I have read that Apple pretty much owns the market in the price points in which it operates. Sure, some have tried to upscale their Windows-running computers to make them seem more like an Apple product, but when it comes to an apples-to-apples comparison using price, Apple wins the day.
Back to the tablet space.
Some device makers have tried valiantly to provide Android-powered devices that on the surface would appear to trump an iPad in every way, and then priced that device on top of what an iPad would cost. The results have been a disaster. Few are going to buy a Xoom/Galaxy/whatever if they can get an iPad for the same price.
Amazon seems to be taking this fight the most serious by pricing its quasi-tablet Fire device at less than half of what an entry-level iPad would cost. Sure, the Fire lacks all the pizzazz of an iPad or other tablet devices, but it’s also not priced like other devices. It provides 75% of the functionality of what a top-line tablet provides for 40% of the cost.
We have all seen what happens when a tablet maker slashed the price of their offerings. People begin trampling each other in their attempts to get their hands on those devices. Hewlett-Packard and Research In Motion have been able to move basically all of the tablets they produced once they realized that people had no interest in purchasing their products at a price similar to an iPad.
Motorola and Verizon Wireless seem to have taken this bit of pricing trickery to heart as the latest Droid XYBoard device (worst name ever!) is launching at a price point below a comparable iPad model. I still think the $100 price difference between the two is not enough to sway a majority of consumers, but it’s a start and maybe shows that those non-Apple players are beginning to see that they can’t charge the same amount if they want to see any serious uptake.
Despite my indifference to the tablet market, I still want to see some excitement in that space. But, until non-Apple device makers figure out this pricing model, I don’t see much in the way of shifting market share.
In the end: If it’s priced like an iPad, it better be an iPad. Otherwise it’s just a toy.
OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:
–Yahoo recently came out with its ranking of top search terms for 2011, though with a few weeks still left in 2011, I am not sure how they can stand behind these results. Anyhoo, despite all the war, famine, natural disasters, heroes and Kardashian-related nonsense that marked the past 11-plus months, Apple’s iPhone topped the list of things most often searched using Yahoo.
Seriously?!?
Don’t get me wrong. The iPhone is indeed a conversation piece, but what it with all the searching about it? I know many people live and die according to the iPhone launch cycle. But, the most searched-for thing of all things?
Though I will definitely take people going search crazy over the iPhone than what Yahoo said was the top search term between 2005 and 2008: Britney Spears.
On the mobile side, Yahoo noted that “iPhone 5” was the top search item from mobile devices during the first 11-plus months of this year. Another interesting topic since there isn’t something called an iPhone 5, but I guess that shows the power of anything iPhone. In a related note, No. 10 on the mobile search list was “May 21, 2011 Rapture.” Like I said, a related note.
I welcome your comments. Please send me an email at dmeyer@rcrwireless.com.
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