My friends and I have been discussing whether the iPad market will be More like the iPod market or whether the iPad market will be more like the Windows market. The iPod market, or MP3 player market is completely dominated by Apple despite the best efforts of Microsoft and dozens of other companies intent on beating the iPod. Ten years later, Apple still dominates because of the iTunes store. As it turns out, players that can't play or sell the songs you want won't cut it no matter how much cheaper it is, and as Apple has proven, as long as your price is in a narrow band compared to the competition, a premium value can win if you have a sustainable advantage, like iTunes store.
The Windows market showed that a cheaper multivendor solution can win even with an inferior product. In this case, Apples price differential was too high relative to a similarly equipped Windows machine and Apple had no sustainable advantage. Better software was't enough.
Which is the tablet market? I argue that it is more like the iPod, MP3 player market and less like the PC market. Apple has a commanding lead in tablet market after defining the category (less than a year ago). The challengers, like the Motorola Xoom are smaller devices where screen size is a value, running inferior software (Android offers fewer features, is a lower quality development environment and enables more promiscuous (bad for security) than iOS) and are MORE expensive for about the same package.
is it significant that Apple iPads are cheaper than Xoom? You bet it is. Probably fatally for Motorola. I believe that Apple is building a commanding lead through it's prudent investments in the multitouch screen supply chain. Years ago, when Apple was winning with the iPhone, they realized that the most critical element in the package was the wonderful touch display and committed to significant investments to help Chinese manufacturers strengthen the quality and quantity of supply. These manufacturers committed their factories to Apple and Apple devices. To me this is a brilliant move like Rockefeller signing contracts with the railroads in the 19th century that disadvantaged his competitors. From what I've read, this means that Apple's competitors have only inferior screens and less quantities available. Ergo, they have to use higher prices to regulate the limited supply of Xoom and other challenger tablets.
After all, the eight million iPad tablets shipped in 2010 is a massive 2.5 million square feet of active touch screen surface. The forecast for five times more iPads to be shipped in 2011 brings that to 12.6 million square feet. Apple's sustained supply chain advantage will be tough for any challengers to upset in the forseeable future. These manufacturing processes are complex, automated and very expensive. And, that is why I believe Apple will still dominate tablets two years from now.
I've been a user of the Apple iPad for several months now, and have experimented with using it instead of using the laptop for work. I bought the iPad, breaking my own rule to never purchase the first rev of anything, because I estimated that any subsequent improvement in yet-to-be released iPads would be features that I would not be willing to own. I expected that Apple's useful (to me) improvements would be software updates and not hardware improvements. Therefore, since the basic experience would remain intact, and since the iPhone software library was both compatible and extensive, I rationalized breaking this rule and opted for the tablet in early summer 2010.Laptops are more nomadic computers than mobile computers.
Also, I researched the features of the device, read the reviews of what I would expect to be important apps for my work and purchased the device with my eyes wide open.
As it turns out, in my work life, much of the task of being an analyst and market researcher is supported nicely:
Some prognosticators expect that tablets will take market share from other computing categories such as laptops, and I agree that in many job classifications the tablet can justify a productivity boost that comes from truly portable computing. Laptops were never really mobile computers, but were nomadic. Nobody walks around fiddling with their laptops; nobody reads their laptop screen while waiting for the elevator. But they check their tablets.
Tablets will change work styles for many people, even though in the current economic climate most users certainly don't see it coming anytime soon: 84% of our mobile panel have no plans to use an Android tablet within six months, 63% have no plans to use iPad within the next six months, 92% have no plans to use BlackBerry PlayBook within the next six months and 98% have no plans to use a Nokia table within the next six months.
Here's a compelling realtime comparison of the BlackBerry PlayBook and the Apple iPad.