The whole tech enthusiast world looked on yesterday as Google announce an array of new products and services at the opening of Google I/O 2012. Among them was the long awaited Nexus tablet. But, what caught me entirely surprise, was that this device, the Nexus 7 wasn’t announced as the high-end, super powered tablet I expected. Has it really come to the point where nothing can compete on volume with the iPad, unless it’s much cheaper?
Towards the end of last year, Amazon released its own tablet, the Kindle Fire. The small 7-inch tablet was only released in the US, and yet sold/shipped over 5 million units in the holiday quarter. At the same time, Apple sold 15 million iPads. That’s essentially 1 Kindle Fire per 3 iPads. Not bad going. Other, higher priced tablets didn’t fare as well. In fact, Android tablets accounted for 39% of the tablet market, and half of those were the Kindle Fire.
I remember reading some intriguing figures over the past few months stating that right now, for every Asus Transformer sold, Apple sells over 10 iPads. The stats are the same for the Galaxy Tab 10.1, and even worse for the rest. And, you can be sure that none of these manufacturers care what percentage of the market is Android. Samsung wants Samsung to do well, they want to sell as many Tabs as possible. They won’t settle for having such a small chunk of the market, just because Google is doing well. So many manufacturers have virtually given up; HP’s TouchPad was a fantastic product, but way too pricey. The PlayBook was a disaster. So, it begs the question, can anyone best the iPad? And, I don’t think they can.
The tablet market isn’t like the smartphone arena. It’s new, and although Apple wasn’t the first to create a tablet PC, it was the first to create one that everyone wanted. The iPad is THE standard, and ever since it launched, companies have striven and failed to match it. What’s the answer? Create a new market of low end, attractive tablets. Amazon got it right, and now so has Google.
The Nexus 7 carries the well regarded brand name associated with quality Android smartphones. And, although the Nexus phones are top-of-the-line, the chiefs in charge of Android knew that would be a huge mistake with the tablet. The iPad has won the 10″ premium tablet war. Google would have a better chance competing with Amazon and its Kindle Fire. Just from comparing the specs, and reading initial thoughts on its performance, it shouldn’t have a problem with creating a huge presence and completely dominating the low-cost side of the tablet lineup.
One huge question for me is: at what cost is Google selling this tablet? The Kindle Fire sells at a loss, but, Amazon is clearly going after revenue made from its digital content offering. It’s quite clear that the Android makers are going down the same route. All the advertising and promotion is about the Play Store. The promo features books, games, video, and you even get a gift voucher to use in the Google Play store when you purchase one. It’s screaming “buy content”. Think of it this way: a decent smartphone will cost over $400 SIM/Contract free, and the most expensive component is the display (usually between 4″-4.5″). This thing is 7-inches, with a resolution of 1280 x 800 (pixel density of just over 200 ppi). The screen isn’t cheap. To add to it, it packs in the latest and greatest NVIDIA Tegra 3 processor. There’s no way Google can be making money from selling these at $200.
By pricing it so low, it’s a two-edged sword. On one hand, it will attract many buyers who can’t afford an iPad and don’t like the Kindle Fire (notoriously laggy). One the other, it’s sending out a message that it’s not as good as the iPad. With a high price comes the expectation of a great product. With a low price comes the opposite. I’m not saying it’s not a good tablet. It clearly is. But, any average consumer looking for a serious tablet will only look one way: towards an Apple store.
What are your thoughts? Will Google make another attempt at competing with the “higher end” iPad? Or is sticking to the smaller, lower price tablets a better plan?