- Jan 6, 2011
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Ive been thinking a lot about the popularity of tablets and the problems manufacturers face coming up against the iPad. The devices that we see here at CG are all pretty amazing even the Playbook was a cool, if flawed, device but no one device seems to be able to grab any traction. In looking back, I see echoes of the netbook craze of the oughts, and the parallels with this fad (along with the distinct differences) are very telling. As youll recall, Apple sat out the netbook race. Sure, they put one ultralight device forward, the Macbook Air, but it was a premium device, while the other manufacturers drove prices into the dirt and sent quality lower and lower. The result, if youll look at the blasted laptop landscape today, is a market full of an amalgam of mid-range fleet laptops for business travelers that have taken some design cues from higher-end netbooks and goofy art-themed mini laptops for students. range fleet laptops for business travelers that have taken some design cues from higher- end netbooks and goofy art-themed mini laptops for students The netbook at least the small, squat, and compact devices so many claimed to love has been abandoned for 13- to 15-inch models that are considerably thinner and lighter than they were a few years ago. Although my evidence is more or less anecdotal, I can assure you this is the trend Ive seen in the the current crop of laptops coming up in the next few months and no matter how much you defend your netbook, you have to admit they got pretty bad near the end of the decade...
So how does the current tablet market compare to the long decline of netbooks? Well, I believe that the two markets are, in a sense, similar, but its the differences that are preventing any one manufacturer from gaining any traction in the tablet space.
First, we need to make a basic supposition. We assume, for sake of argument, the iPad is most popular consumer tablet thus far created (the sales numbers bear that out) and we need to assume that the popularity of the iPad is something to which all manufacturers aspire.
I also posit that manufacturers are social animals. They see what their peers are doing in the space and then head over to Asia to have it manufactured. There are only a few major manufacturers and these factories offer fairly limited configurations from which OEMs can choose. Sure, guys like Dell and HP can order up their own silicon but they didnt get their laptops below $500 by customizing the motherboard. They bought some standard boards, slapped in some chips, and created permutations of the same thing in different trade dress. As it once was with stereos manufacturers would hide the extra features like EQ sliders inside the case and simply charge a premium to expose them you were basically buying the same laptop with a different name.
Essentially, laptop manufacturers saw a way to make a cheap buck with commodity hardware. They offered sub-par performance and non-optimal sizing to a world that was ready to buy into a lie that you didnt have to pay for quality. The same consumers who lapped up netbooks in the hopes that they would make good second computers are now lapping up iPads and, to a lesser degree, Android devices and actually using them as second computers.
In terms of manufacturing, the age of tablets is different from the age of netbooks mostly because there is no way to make a cheap tablet. You only have a certain, finite amount of space inside a small tablet case and, more important, tablet PC parts are expensive and often custom-built. Touchscreens are expensive because mother-glass manufacturers see Apple buying up their stock and they hope to make a killing. Flash memory is expensive because, well, Apple bought it all. And the tablets themselves are expensive because Apple set the prices. If Motorola could have gotten the Xoom below $250 Im sure they would have but, given that there is a more popular alternative out there that costs twice as much, playing a scorched-earth pricing game would leave money on the table.
But manufacturers cant beat the iPad because theyre still playing by netbook rules. As Stephen Elop said, there will soon be
200 tablets on the market and only one clear winner. But hardware manufacturers are like sharks they cant sit still. They need to produce products constantly, no matter the popularity, and as a result, on the aggregate, no one device they produce out of the other 199 can touch the reigning king. It may sound hyperbolic but its true. However, theyve been surprisingly reticent to produce many tablets. Ive heard it said over and over: If RIM had released the Playbook a year earlier, they would have owned the space. Instead they announced early and hemmed and hawed and then released a device that is potentially superior to the iPad but, in practice, little more than a smooshed out Blackberry smartphone.
Also, consider the reason carriers selling tablets with a contract: its the only way manufacturers can make a modicum of profit. Tablets are expensive to produce. Even at $499 they cant make much out of a straight-to-consumer deal. There is no other way to explain why $450 Acer Iconia A500 is more expensive than the presumably more fully-featured Acer Aspire One netbook other than the commoditization of parts. While margins are slim on both devices, I would wager Acer is making more on the Aspire One than the tablet.
In the end, manufacturers must do what they know best in order to survive. They have to commoditize devices to reduce their price sufficiently and they have to drive down prices to remain competitive in a saturated marketplace. The current tablet market will not allow that for many of the reasons I mentioned above and also, simply, because no one wants a garbage tablet. In fact, a bad tablet is worse than no tablet at all, as evidenced by all the years Microsoft tried to flog their Tablet Edition software and hardware to an uninterested populace. On the low end the only tablet worth mentioning is the Nook Color, and anyone who tries to sell you a $99 is out to steal your money. In the end, the netbook craze resembles but can never mirror the current tablet craze. Although Im reticent to call this a post PC world, I think this is a bit more than a fad, though, and it seems that Apple is so far ahead in terms of sales, popularity, and usability that everyone else is, in a word, flummoxed. They just cant fit a tablet into a global supply chain that rewards chintz.
Original Article:
Why Cant Anyone Make A Popular Tablet?
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