Friday, 29 June 2012

Tablet Star Wars

New tablets have been launched this summer by a number of players to meet the demand for media hub devices in an increasingly crowded and fast-growing market. The most recent tablets to enter the market are Surface introduced by Microsoft and Nexus 7 introduced by Google and Asus. Surface with its larger screen is intended by Microsoft to take on Apple's highly popular iPad, whilst the 7-inch tablet by Google will be challenging both Apple and Amazon's Kindle Fire.

In a recent survey published by IDC in March the global shipments of tablets were reported to have grown to 28.2 million units in Q4/2011. The introduction of Amazon's Kindle Fire, a cheaper alternative to the iPad, seemed to raise consumers' awareness of the media tablet category. The continued strong sales of the new iPad with its high-resolution Retina display has further boosted market growth. IDC adjusted its 2012 shipment forecast to 105 million units (a jump from the previous 87.7 million projection). Another study by market research firm Gartner published in April expects worldwide tablet sales to skyrocket to 118.9 million units (up from 60 million last year). Gartner still expects Apple to remain the dominant player with the iPad accounting for more than 60% of all sales this year. One wonders how the introduction of Nexus and Surface will impact the overall sales forecast of tablets. Certainly consumers will have more alternatives to choose from and the introduction of more affordable tablets is likely to boost demand.

According to Wired Gadget Lab the Nexus 7 tablet is a better-performing device than its immediate competitors, the Kindle Fire and Samsung's galaxy tablet. The media experience is reportedly good including widgets for content like books, magazines, movies and music. The Nexus tablet is fast and it will sell at affordable prices between $200 and $250. It will be interesting to see if Google will now succeed with a tablet of its own, really taking on Apple and Amazon in the race to become a dominant player for the distribution of media content. Google has made repeated efforts to break into the tablet market, which was defined by Apple with the launch of the iPad in January 2010. 

Surface runs a variation of Windows 8 operating system to be released in the fall and the tablet was launched by Microsoft on June 16. It is about the same weight and thickness as the iPad, with a 10.6-inch screen and a built-in "kickstand" for watching movies etc. It also boasts a detachable cover serving as a keyboard (see the hands-on analysis by Gadget Lab). Surface will offer Windows users a real alternative and it can also been as a defensive action by Microsoft as the iPad has eaten into sales of low-end Windows laptops. However, with its new features and a pumped-up Windows 8 OS it should really be seen as an offensive move to take on the battle with Apple, still dominating the growing tablet market. Microsoft has not yet announced that it will push into entertainment and content sales, unlike Amazon, Apple and Google who have built their own ecosystem of apps and content to be downloaded onto the 'Media Hubs'. However, to my mind the introduction of Surface represents an episode of Tablet Star Wars - will the Microsoft Empire be able to strike back at Apple? Pricing and availability is yet to be disclosed.

It will be interesting to follow the market development with the introduction of these new devices. For content providers the rapid development of the tablet market implies an increased sales opportunity on new platforms, as well as a challenge to provide media content on different operating systems.


  1. Tablets: On the long run, can anyone meaningfully differentiate the piece of equipment, i.e. hardware. Do competitive advantages originate from content or devices? I propose that the winners are the ones who will offer the most relevant and unique content. Will you bet on the winner?

    1. I agree that content and services matter in the ecosystem. However, usability i.e. Device + Operating System are crucial as far as consumer satisfaction is concerned. That's why Apple have given the best user experience so far. Let's see how the others do in the near future. Now speculation has surfaced that Microsoft's Surface tablet may be quite highly priced. Launching in October.


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