Wednesday, September 28, 2011

Will Mini-Tablets Carry the Day

Everywhere I look it seems that I'm reading that Amazon has released a major competitor to the iPad, in the form of a small tablet computer that runs a modified version of Android. Amazon is, of course, attempting to grab market share and is reportedly selling these small tablets at a loss. Apple has a very comfortable lead in the tabloid market and sells its products at very healthy margins, but can be expected to respond to any significant competitor. Good stuff for consumers.

But when I read articles that suggest that a smaller, plastic notebook is the first serious competitor to the iPad because "it seriously undercut[s] the iPad in price," I can't help but think that the author has all the sophistication of somebody who would suggest that the Yugo was the first serious competitors to Volvo. No, I'm not suggesting that Amazon's quality is comparable to Yugo's, but you really do have to look at more than "it's a tablet". You should be considering size, quality, components and functionality when comparing products, not just declare, "They both have tires, gas motor, seats - they're cars! Who wouldn't choose the Yugo?"

Rumor has it that Steve Jobs consistently rejected proposals to produce a smaller version of the iPad. I am not going to venture a guess as to whether that was a, "No, it would be a bad product," or, "No, I don't want to increase our costs and divide our market by making a smaller iPad when we're functionally the only game in town," but one way or another Amazon is doing real world market research into the viability of smaller tablet computers. If the "Kindle Fire"<sup>1</sup> sells millions of units, I don't expect Apple to take long to offer a competitively priced mini-iPad.

I don't want a smaller tablet computer - but if I were a Kindle user I might consider the "Fire" if it were time to upgrade. Even there, with the ability to compare products, I would be inclined toward the larger iPad screen, but if cost were a serious issue.... Let's just say, it will be interesting to watch this play out.

What I see in looking at the Fire, and at the expansion of "Amazon Prime" streamed content, is a potential - and the foundation of a plan - to offer serious competition to the iPad, but I see the Fire as being more of a serious attack on the Nook, crossed with a perception that it's a good time to strike at Netflix.
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1. Are Amazon's references to fire in relation to its book readers part of a marketing strategy? For me, they evoke Fahrenheit 451, but I don't think that's the marketing message Amazon intends.

1 comment:

  1. I know what you mean. I read an article today that was supposedly about how iPad owners were tempted by the Fire, but the gist of the article was summed up by the iPad owner stating, "Nothing is taking the place of my iPad."

    Maybe a big version of the Fire will, but in a sense this is like bad political campaign coverage. "Will Huntsman knock Romney out of the race?" No, he won't. Even if he should, no he wont.

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