I've been thinking about writing this editorial for some time now. And today, with the announcement of Panasonic's upcoming Toughbook Android tablet, I finally decided to go for it. The point this article is trying to make may not be abundantly clear in the title, so let me see if I can get it across as a question: Is it just me, or are there a suspiciously large number of companies in or planning to enter the Android tablet market?
It sounds like a silly question to ask. And to a degree, it's not exactly a hugely relevant question, either. Who really cares how many companies are trying to get into the tablet market? Those who make tablets that don't sell will fall out of relevance, while those that make ones which succeed in the marketplace will continue making them. It's natural selection - it just happens to be our wallets, not the intricate workings of evolution, that are the force of nature at play here. And really, that's true. The market for consumer electronics has evolved in ways no one could have predicted in the last 20, 10, or even 5 years - and will continue to do so.
But even with this, as we perceive, "boom" in Android tablets, I still wonder: are they really going to experience the ongoing explosion of diversity their evolutionary cousins (smartphones) have? It seems that many assume, based on all the recent entries of various manufacturers into the Android tablet fray, that the clear answer is yes. I'm not so sure. Let me offer up a few thoughts that fuel my mild skepticism.
This is a great word. I saw it used in a fantastic article today about the history and inner workings of Android by Fortune over at CNN. When discussing the explosion of Android smartphones, the writer of that piece wondered if handset manufacturers ran the risk of becoming "Dells" in the phone marketplace - that is, competing on price point and minor hardware differences, rather than features. For phones, I don't see this happening. Carrier price subsidies ensure that there's really only two price points to compete at: budget and premium.
In the world of laptops, when you're buying a $600 notebook, a comparable but lesser product that costs $500 might catch your eye - because it's saving you $100 out of 600. The more expensive the good, it seems the more we're willing to sacrifice in order to save money. And when it comes to computers, you have a seemingly endless selection of competitive products to choose from.
With smartphones, customers have, really, three options: exciting, old, or boring. Exciting will cost you anywhere from $100 to $250, while old or boring budget handsets generally come in below $50 (or more often, free). Carriers like you for your contractual commitment, not your equipment purchases - so there's little reason to compete for every penny on handset prices. Very few people buy smartphones off-contract.
But tablets are different. Sure, there's carrier-subsidized tablets out there - the Galaxy Tab, the Verizon XOOM, the EVO View 4G, the G-Slate, and likely more in the future. But those are all made by the "big 4" Android handset manufacturers right now - Samsung, Motorola, HTC, and LG. Not to mention the carrier-ized G-Slate and Galaxy Tab have seen more "special offers" and "temporary price cuts" than the Blu-ray aisle of a Best Buy - which is a polite way of saying they aren't exactly flying off the shelves. And let's not even talk about the Verizon XOOM's sales figures when the Wi-Fi version's have already drawn criticism enough.
3G/4G tablets are fine and dandy, but the average person is toting their tablet into the bathroom, the office, and the office bathroom. Places that all (hopefully) have Wi-Fi. And when they aren't, the average Android tablet owner probably has an Android phone and understands what "tethering" is. People who buy carrier-subsidized tablets? They probably talk about "synergy" or "workflow" on a fairly regular basis and fly business class. In short: it's a niche market.
We all know the real tablet war is being waged in a different arena: "Wi-Fi only" - and it's a veritable Wild West of consumer computing. Before Honeycomb, every Android tablet on the market, frankly, sucked (maybe excluding the Galaxy Tab, which has its share of devotees). Now everyone and their Aunt's-Uncle-twice-removed is making something with 4 corners, 2 cores, and Android 3.0 onboard. The lack of product differentiation is almost scary. Tegra 2, Android 3.0, 10.1 or 8.9 inches, and a huge multi-day battery describe almost every major Android tablet. Let's see:
- Motorola XOOM
- LG G-Slate
- Galaxy Tab 10.1
- Galaxy Tab 8.9
- ASUS Transformer
- Acer Iconia A500
- Dell Venue Pro
- Toshiba Thrive
It's like a formula. That's Dellification. And which one (among those available) seems to be selling the best? Why, the cheapest one, of course - the ASUS Transformer was so popular at launch that retailers were barely able to keep up with demand (supplies have since increased). Also, it's the one most like a netbook, thanks to its keyboard dock. When you ask people to choose among a group of differently-priced products that all essentially "do" the same thing, they're going to pick with their wallets.
A company like ASUS survives on razor-thin profit margins, and isn't afraid to scrape by on them to win over customers - volume is everything. HTC, Motorola, and Samsung are trying to sell premium products in a budget market - though Samsung's pricing on the Tab 10.1 (for what it is) really straddles the fence compared to fare from HTC and Moto.
What happens when someone bucks the trend and tries to make a different premium tablet product? The HTC Flyer is probably the best example of this. $500 for a 7-inch tablet, running on a single core (albeit a quick one), in addition to the $80 you'll spend on the stylus that you'd have to be nuts not to get with it. Minus the stylus, we saw this tactic last year with the Galaxy Tab. It didn't work. Why?
An iPad 2 will cost you that same $500, though you don't get an opportunity to spend any more cash on a nifty digital pen. And when you get into that $500+ premium segment, Apple dominates to an even greater degree. Because at this price point, people are paying for a brand. You could also pick up a Motorola XOOM Wi-Fi with a little searching around that $500 mark. But why would you? It's heavier, fatter, and probably slower.
So, What's The Point You're Making Here?
Budget-friendly Android tablets seem likely to stick around. Premium ones seem likely to continue being marketplace flops - unless something major changes. This, in turn, leads me to the title. Will premium Android tablets ever be viable? I can say I'd be interested in an Android tablet that either (1) is in terms of specifications, performance and quality comparable to an iPad at the same price, or (2) truly outperforms an iPad for a bit more money. But I have yet to see a single product that is either of those things.
Samsung's Galaxy Tab 10.1 is the closest we've gotten - matching the iPad's price, and its slimness. But reports of screen separation on I/O models of the Tab, Honeycomb's notorious bugginess (depending on who you ask), and the lack of tablet apps on the Market make me wonder: can the Tab succeed where all its previous competitors have failed? And if it can't, will manufacturers start losing in interest in the tablet platform for Android?
And with an ARM-ready Windows 8 optimized for tablets around the corner, how focused on Android will companies like Acer, ASUS, and Dell remain? Microsoft has historically done very well selling hardware in the budget market, where price is the major concern. And without the great equalizer of carrier equipment subsidies, this is real food for thought in the tablet ecosystem.
This is all off in the distance, though. Google obviously wants Android to live on tablets, and manufacturers think tablets are the next big thing. Nobody's saying that HTC, Motorola, Samsung, or LG are getting out of the tablet game next week, month, or even year. But I am saying that the combination of price competitiveness through carrier subsidies and the increasing ubiquity of smartphones are two factors that won't be able give Android tablets the room to grow that handsets have had.
Let me know your thoughts in the comments.