Cheaper
tablets to take on the iPad 2
Mikaei Ricknas ponders whether Amazone can
succeed where Motorola, Blackberry and Samsung failed before it.
While
the iPad continues to be a big success, the tablet market offers a harsher
climate to other vendors. It’s thought that pricing strategies could be an
important factor in their difficulties.
Apple sold 11 million iPads during the
third quarter of 2011: while Samsung has been its most successful challenger
selling 1.6 million Galaxy Tabs in the same period, its sales figures pale by
comparison, other manufacturers have faced a tougher struggle: Motorola sold
only 100,000 Xooms, and Blackberry just 200.000 PlayBooks.
Both and Motorola Xoom use the same
pricing strategy as Apple for its iPad 2, starting at $638.4 for a 16gb Wi-Fi-only
model, the playbook now sells for around $398.4, but with a smaller 7in screen,
so it’ll be interesting to see what impact Amazone will have on the market,
when its kindle fire goes onsale in the us for $199.
The kindle fire is predicted to
outsell all other challengers, and prove the point that price is critical to
compete with Apple. Amazone has seen such pre-order demand for its kindle fire
that it decided to ramp up production. The company is ‘increasing capacity and
building millions more than we’d already planned’, said CEO Jeff Bezos.
The fire does most things existing
tablets do, letting you watch movies and TV shows, listen to music, read
magazines and books, and more. It has a high-quality IPS touchscreen, a fast
dual-core processor and a slick design. Besides a smaller display at 7in, half
the storage capacity at 8GB, and a lack of productivity tools such as email,
the main difference is in its price.
Does price matter?
“High-price tablets are simply not
going to sell in meaningful volumes for the foreseeable future,’ said Richard Windsor,
global technology marketing analyst at Nomura international.
Neil Mawston, director at market
research company strategy analytics, agrees: “Pricing is critical for tablets. Apple
can charge a premium, but very few others can,” he said.
Amazone slashing its price to the bare
minimum has driven growth, whereas Motorola, HTC and other manufacturers have
tried to maximise pricing and that has backfired, added Mawston.
Rock-bottom clearance prices as HP
discontinued its TouchPad - it was available for just $142.4 - helped
demonstrate that pricing is a critical factor, according to research firm Canalys.
HP slipped 560,000 units.
But other analysts believe tablet
vendors need to look at more than just their pricing strategies. Robert Cozza,
principal analyst at Gartner, points to the weak user interface of the android
honeycomb tablet OS as part of the problem. Amazone, meanwhile, has added its
own user interface to android.
Media applications and content are
also important factors, said Cozza. “The user experience on android simply
isn’t as good as it is on the iPad, and you don’t have all the applications and
access to the content Apple offers,” he said.
The way people view the tablet market
also puts many vendors at a disadvantage, according o a survey of 4,500 tablet
owners conducted by research firm CCS insight.
Almost half see the tablet as a new
product category, where branding is important. Apple is now viewed as the
‘safe’ brand, according to CCS insight mobile analyst martin garner,
furthermore, almost one third consider the tablet to be part of their computing
setup, and that’s bad news for phone vendors such as HTC and RIM.
To turn things around, the android camp
has a lot of work to do. “It needs pretty hardware designs; more developers to
develop tablet-optimised applications, services and websites; and Google to
develop a more tablet-optimised browser and operating system, which it has done
with android 4.0.’ said Mawston.
Android also needs more attractive
pricing, a better messaging platform, an improved application store end a
stronger focus on the consumer, Mawston added.
Despite current challenges, most
vendors are likely to stick it out, if vendors get tablets right, they will
play a big role in the future of computing. Garner expects more “proper
competitors’ to the iPad to arrive in 2012, and he’s not alone.
“In 2012, we can expect established
vendors to launch lower-cost tablets. If there’s a significant price gap to the
iPad, then there may be some users who just want a good browsing experience.
But they will still need strong content and services” said Cozza.
Next year will also see the launch of
windows 8, which will be used on both PCs and tablets. The OS will turn the
tablet market into a three-horse race between Apple, Google and Microsoft.
