Tablets, Tablets, and More Tablets

So if you believe the tablet wars are over, you would declare the winner to be Apple by a mile—but you would be wrong. Tablets are not only the new thing, they will be around for a long time. History has a way of repeating itself.

The Apple iPad rules the tablet universe, of that there is no doubt. Two versions of the iPad have been introduced in the time it has taken most companies to bring the first version of their own tablets into the market. Reviewers have not been kind to the other tablets on the market and the press is full of comments that Apple rules the tablet market and everyone else is an also-ran.

I think those trying to outdo the iPad have several problems. First, they are coming out with a tablet product only, without the back-end support of iTunes and the Apps store. Next, the developer community has moved to the iPhone and iPad platforms because coding for these two hit products is relatively easy. Only one operating system and one set of software development tools are needed. Further, the market for both the iPhone and iPad is huge compared to most other markets. Apple does a great job of vetting applications for the platforms and, to date, there have been no bad applications permitted in the app store and no issues with any delivered via the app store as far as I know.

Next up is the fact that Apple has set the expected price for the tablet market and if others don’t meet or beat these prices they are perceived as not being competitive. This has certainly hurt the Motorola Xoom, which starts out $100 more expensive than iPad’s lowest price model. Not only have others missed the price point, they are having problems meeting making money on their own tablets.

So if you believe the tablet wars are over, you would declare the winner to be Apple by a mile—but you would be wrong. Tablets are not only the new thing, they will be around for a long time. History has a way of repeating itself, not that Apple has ever paid attention to history, but Apple had the PC market to itself with the Apple II, then lost it to IBM, which in turn lost it to Compaq and HP, which in turn ended up sharing it with Dell and a host of offshore companies until the industry contracted and today there are only a few choices left.

The same thing happened in the world of notebooks. Grid had the first true notebook, then Data General, then a host of others including IBM with the ThinkPad line, Toshiba was huge, and HP, Dell, Compaq and many more were going strong. Again, the companies that are still in the laptop business have thinned out and notebooks have also become commodity products.

I am not saying this will happen to Apple, but if you go back in history you will find that Apple lost out because of its closed way of doing business (no clones permitted). When it did permit clones, it missed the timing big time. But Apple has introduced and held onto the lead with iPods, iPhones, and now tablets so you might think history may no longer repeat itself. However, I believe we are only at the beginning of the tablet era and there is much more to come. Some companies are holding back and watching the market and not jumping into it quickly, while others are trying to enter into the market quickly.

The RIM PlayBook has been maligned by the press and analyst communities, but this first version of the PlayBook is designed for its loyal BlackBerry customers and I believe it will be a success in that market. What the reviewers missed is the fact that the PlayBook is a companion to a BlackBerry and not really a standalone product, at least this version. Will RIM be able to move beyond that market? I am not sure at this point, but RIM, like other companies, has a habit of keeping at it until it gets it right. Meanwhile, Apple’s closed system may actually hinder its growth going forward, and if it doesn’t play better with the wireless operators that are all trying to find other ways to increase their income, Apple might find itself on the outside of some deals moving forward.

Apple wins for this year, but there is next year, the next, and the next. There is no better market research than being able to talk to tablet customers and finding out what they like and what they don’t like, what they want to be different, what they would like to see added, and what types of applications they would like to see. This first generation of tablets, after the iPad, did not have this type of research available to them. But we are starting to see some focus groups made up of iPad and other tablet users, and many companies are reaching out to this installed base.

Just because Apple has a commanding lead does not mean this will continue, and I believe other tablet vendors will break the code and start offering end-to-end solutions that will be attractive to many customers. It is also possible that some tablet vendors will cut deals to share some of their app and other revenue with network operators and this will be an important weapon against the iPad if Apple does not find a way to do this as well.

It took Apple several generations to get its notebooks right; it offers great products today but if you go back and look at Apple’s first attempts you will find that they were pretty lousy products, and surprising for Apple. Then there is the issue for me of the Android platform and how long it will last before it becomes a target for the hackers of the world and loses favor with many customers who won’t have any faith in the apps available for the platform. Perhaps Google will wake up and take some control over the platform but perhaps not. Meanwhile, don’t count Microsoft out. It took three revs of Windows to get it right and it has been at the wireless O/S game for a long time without ever finding the right combination of platform, devices, and apps. But Microsoft may find it with tablets, and companies still loyal to Microsoft could conceive of and build some very cool tablet products.

The biggest losers in the tablet field will be those who believe that feature creep is the way to go, adding a hard drive, or more ports, making the devices heavier, or bulkier. The next group of losers will be those that believe a tablet and information and applications in the cloud will win the day. Access to the cloud is not ensured, the roadways to the cloud are not mission-critical, and Murphy lives in the cloud as well.

Tablets are here to stay. They will morph over time, but more and more of them will be sold. Apple will, for sure, continue to be a leader in design and innovation, but there is plenty of room for others to play in this market as well. Like all technology markets, we will see the latest, must-have devices leap-frogging each other, and the tablet to beat won’t always be the iPad. It might even come from a start-up company we have never heard of before. Remember that Compaq was born in a restaurant and its first transportable PC was sketched out on a napkin during that first meeting. Dell started in a dorm room, and HP, Apple, and others in garages. New companies, new products, and new winners can come from anywhere at any time.

In the short term, Apple remains the company to beat and its track record with the iPod, iPhone, and iPad looks hard to beat. However, that does not mean Apple will always be in the driver’s seat when it comes to tablets, nor does it mean that a number of other companies cannot make money in the shadow of the iPad.

Andrew M. Seybold

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