By Randy Giusto-
The tablet business you can argue, was really jumpstarted by Apple but it’s about to get a big injection with over 30 models expected to be launched at CES in January, and over 60 new models in 2011. Projections are that this could be a 30 to 40 million-unit marketplace in three to five years.
For years the tech industry has been looking for that “tweener” product, experimenting with ultra mobile PCs (UMPCs) and netbooks and MIDs— mobile Internet devices, the later of which never saw the light of day. But it’s pretty clear now. Tablets are really becoming that “tweener” device. Content companies and major publishers are investing tons of capital around content creation for tablets because they represent a new opportunity where they (the content provider) can control applications and have more creative freedom, unlike in the old mobile world of the smaller screen. Business models are still in flux, and since there are so many (ad-based, subscription, freemium, hybrid, etc.), a content publisher can easily switch to another one if their initial business plan is not generating the revenue they expect. They can also mix models like Rovio the maker of Angry Birds has done with a paid model on iPhone and a free model on Android.
Apple has showed that a constrained UI and device (from a development perspective that is) makes it easier for content providers to keep their development and QA costs down while getting apps and content to market quickly. Touch functionality has opened the development door as the capability comes to all sorts of devices from digital cameras and smart phones, to portable game players and tablets.
Steve Jobs publicly stated that 10 inches is the ultimate size for rich applications on a tablet, and dismissed all the other brands about to emerge around a 7-inch design. But a 7-inch tablet can be pocketed by some, while an iPad cannot. Sure, Jobs would have to get developers to recode their apps to automatically resize for a 7-inch iPad, so there is a barrier for Apple to jump over if they chose to launch one. That’s not likely now. But other technology brands don’t have this hurdle because they aren’t starting with any app legacy. The real question is— will the 7-inch tablet accelerate a paradigm shift and move people away from low-end laptops and netbooks to tablets?
Samsung thinks so. It introduced the Galaxy Tab, and chose not to wait for Google to release Android 3.0 code named Honeycomb (not Gingerbread) early next year, the version after Gingerbread that will support tablet-sized screen resolutions. But there are no apps optimized for the Galaxy Tab, which could become an issue for Samsung over the next six months. Or the Galaxy Tab will be just the entry point of a tablet line that will be extended over time, eventually supporting Honeycomb.
While Apple and Google have grabbed the majority of smart phone OS mindshare in the marketplace and within the developer community (not the same as market share or installed base), there are other OSes trying to grab some beachhead in both smart phones and tablets. This includes Windows Phone 7, Intel and Nokia’s MeeGo, HP’s WebOS, and RIM with an OS for it’s upcoming PlayBook tablet. “But the price to support yet another development platform is a very capital and headcount intensive issue, and that’s a real understatement!” says Walter Delph, Corporate General Manager and VP at News Corp Digital Media. Delph was one of several panelists at Harvard’s Cyberposium 16 this past weekend debating the merits of touch.
This is why, in my opinion, a crowded smart phone and tablet platform market is not going to last more than two years. Small developers only have so many resources, and large content companies have huge capital costs that they just can’t switch on and off.
Apple and Android represent two broad ends of the spectrum. Apple and its iOS is a locked-down, controlled (closed if you want to pick that argument) system where you develop for two screen sizes— a 3.5-inch phone or a 9.7-inch tablet. For developers, the approval process is restrictive and can be lengthy, but the payment process that Apple has created, sets the bar for all others. Apple is a premium brand with high customer loyalty that wants to focus on outstanding tablet apps.
Android on the other hand, I continue to posit, is still like the Wild West. Easy to get into, and no approval process issues. Just test and tweak your app in the emulator and then it automatically gets listed in Android Market. Bang, you’re done! But Android is fragmenting at a rapid pace. To Mikael Hed, CEO of Rovio, the maker of the viral Angry Birds game, “Android is like going back to the past, to the old phone model where developing in Java meant having to tweak for 2,000 device types.” But while Android may mean more work for developers, it’s growing in the market exponentially, meaning that the revenue gains to be had may offset the development angst.
Device vendors are also stretching Android beyond what it was originally intended to be for initially, 4-inch smart phones. But the 7-inch and 10-inch tablets spaces will heat up next year. From a content owner perspective, News Corps’ Delph sees the size and platform war as noise. “Premium content wins the game, I just don’t see a debate where we have to be everywhere. We’re leaning towards Apple for dedication of resources, but we’re not going to ignore Android.” He does think that whoever emerges as number three will have it harder, and I agree. At some point, consumers and the developer community are not going to support more than two or three alternatives in the long term. The economics just don’t work out.
This post was written entirely on a touch-based platform!
– Randy Giusto