Tablet wars heating up this Fall

  • There have been many announcements in the tablet space in the last few weeks, with more to come
  • Despite Apple’s vast market share, there is still a lot of room for other players to compete in

Tablet wars heating up this FallAS Western countries prepare to end their summer season, tech companies are gearing up in the battle of the ever-increasing lucrative tablet market come Fall.
Just a couple of weeks ago, Digital News Asia ran a report which stated that globally, in the fourth quarter (Q4) of 2010, smartphone and tablet shipments exceeded desktop and PC shipments.

It is estimated that approximately 480 million smartphones and tablets were shipped, as opposed to approximately 380 million desktop and PCs, in 2011, according to research firm Frost & Sullivan. The figure for 2012, as you can imagine, would definitely be greater.

Search giant Google fired the first salvo early in the summer when it released its much-awaited Google Nexus 7. It was a runaway hit as Google struggled to meet the demand for its tablet that was manufactured by Taiwanese PC-maker, Asus. The 8GB Nexus 7 shipped for US$199 (RM614) while the 16GB version went for US$249.

Next up was Samsung, who last month introduced its Galaxy Note 10.1, the bigger sibling of the hugely successful Note 5.3. Pricing for the Note 10.1 starts at US$499 for the basic model with 16GB storage and US$549 for the 32GB model, which is expandable with an external memory card.

First announced earlier this year at Mobile World Congress at Barcelona in February 2012, the Galaxy Note 10.1 sports a stylus, dubbed the “S-Pen,” which Samsung believes will set it apart from the competition including the iPad. Analysts however do not believe that this feature is a big deal and have warned that such a feature will do little to make the Note 10.1 a game changer in the tablet space.

Then two weeks ago, online retailing giant Amazon launched its latest iteration of its highly-successful Kindle Fire, an Android-based tablet. Dubbed as the Kindle Fire HD (high definition), the latest tablet by Amazon features an 8.9-inch, 1920 x 1200 resolution HD screen in two varieties; one that works off Wi-Fi at US$299 and another one, over 4G/LTE (the next generation wireless standard), version at US$499, shipping in November.

Besides this, Amazon’s flagship tablet has a number of funky wireless features such as dual antenna as opposed to just one in the iPad, support for both 2.4GHz and 5GHz Wi-Fi and MIMO (multiple-input, multiple-output) antenna technology.

MIMO touts the ability to be much more intelligent and reliable in picking up signals and Amazon has claimed that its 8.9 Fire HD is 41 per cent faster than the latest iPad. Going along with the release of the Fire HD 8.9-inch was its younger sibling the Kindle Fire 7-inch (16GB), going at a mere US$199.

And last Wednesday (Sept 12), Apple may end up announcing its version of a reduced-sized, 7-inch iPad along with its much-anticipated announcement of its latest iPhone to replace the ageing iPhone 4/4S.

Speculation has been rife over the fact that the world’s most desirable tablet maker will move into the zone where it will compete more with Amazon’s Kindle Fire HD as well as Google’s Nexus 7.

It’s hard to tell what Apple’s up to as the Cupertino, California-based company is extremely tight-lipped over its announcements. But whether or not Apple will announce the availability of the iPad 7-inch, or iPad Mini as it has come to be known by pundits, one thing is clear – the market is indeed being flooded with tablet devices.

[Ed's note: Apple's Sept 12 event only introduced its latest iPhone 5 to the public. There was no mention of Apple's plan to bring to market a smaller 7-inch-based tablet to date, despite speculation in the New York Times about this possibility]

Tablet wars heating up this FallAn upstart strategy

So with these players flooding the market with smaller-sized tablets, whom exactly are they targeting? Despite Apple already having a vast market share with its iPad device, roughly about 70 per cent of the market according to some industry analysts, there is still a lot of room for other players to compete in.

I for one think that Amazon’s strategy is brilliant and have effectively extended Apple’s highly successful iTunes model going a few steps further.

The latest Kindle Fire HD is significantly priced lower than the new iPad; for example, the costliest version, at US$599 for 64 gigabytes of storage, severely undercuts the top-of-the-line US$829 64GB iPad.

In effect, Amazon has successfully navigated its products at a price point that is much lower than Apple, something which the first wave of Samsung Galaxy Tablets could not manage to do.

When the Samsung Tab 10.1-inch, 8.9-inch and even the 7.7-inch first came out, their pricing was too close to the iPads for the masses to even think of considering an alternative to Apple.

Also, with the Android operating system and hardware-like memory and processors being not as matured as they are today, Samsung could not break the stranglehold that Apple had in the market.

Amazon and Google could very well have forced Apple’s hand as they have managed to open up a whole new tablet market – the sub-US$500 one – with this new round of products.

That said, Amazon’s approach also ties its user down to its peculiar user interface and experience.

For example, Amazon has its own app store, which is different from the Google Play on the Nexus 7, and its UI (user interface) hardly resembles the look and feel of a stock Android operating system.

Obviously, something’s got to give if Amazon is selling its wares at such a low price point.

Effectively, Amazon is counting on its users and subscribers to tie in to its Amazon service in order to continue making money as the game has moved from selling just hardware to one that sells you services, which is a recurring form of income.

Amazon is able to do this because it is already the largest online retailer in US and so its brand and loyalty garnered in the mind of consumers – and a new class of followers who end up buying the Kindle series of tablets – is pretty high.

But one drawback, if any, is that the Kindle Fire HD is very US-centric given that much of Amazon’s services are only available to its home country, while Google’s Nexus 7 has a wider appeal due to its more open nature.

Still, both Amazon and Google have up the ante on Apple and all eyes will be on the Net as Apple makes its announcement tomorrow (Thursday morning, Malaysian time) to see if the tech behemoth will be able to respond and what will it offer to keep consumers loyal to them.

Meanwhile, do check out an interesting tech blog post on GigaOM, expounding further Amazon’s business model for its Kindle Fire HD range of products.

This article previously appeared in The Malaysian Insider

 
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