Monday, September 19, 2011

Tablet Market Status: Individual Android Tablets Has Largely Failed To Penetrate Market; $500 Price Point Too Difficult To Sustain

Another tablet maker pars down tablet shipment.  This time, it's Lenovo, who had some strong fighting words for Apple and the iPad earlier in the year.  For Lenovo, it is another slap in the face as Apple has easily surpassed the China based PC company.  For Android, the 2 million tablets shipped (not necessarily sold) would help those keeping scores give Android a larger share of the tablet market, individually, we are seeing one tablet after another fail to gain traction.

The problem isn't that the tablets are inferior to the iPad.  It is that the $500 and up price point is the new "$1000".  For a premium tablet, people want the iPad just as folks who pay more than a $1000 probably wouldn't rule out the Apple's MacBooks. But if this is the case, where does this leave tablet makers?

For Android fans, buying a $500 tablet running Google's mobile OS is a non-starter.  For your average mobile warrior, they have two clear choices - the iPad or not.  At $400-450, it could sway a few users.  At $350-$400, an Android tablet versus a $500 iPad becomes more clear.  

At that point, the competition may not be with Apple but it pits one Android tablet maker against another.  HTC and Samsung might have gained enough recognition to become a household name but Lenovo or anyone else certainly has not.  And with Sony's tablets going on sale soon, Samsung's Galaxy brand stands in the way of anyone else gaining traction in the tablet market.

It's why Barnes and Noble's Nook has found some success where no others have.  And it's why Amazon's Kindle tablet will likely have a sub-10" screen and sell for around the same price as the Nook.  Furthermore, unlike regular device makers, Amazon and BN are not just selling tablets to the masses: they are also selling books, apps, and services.  

That is not the case for anyone else. Google has to really figure out something that will help its Android partners.  Android 4 better be really good but even that might not be enough.  Google has to offer its partners a reason for selling Android devices at razor-thing margins.

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