Thursday, November 25, 2010

Tablet Wars (2): half a tablet can be better than one

At the October earnings call, Steve Jobs both defended the long-term future of tablets and attacked the 7" form factor. While I agreed with him on the former, after five days with a 7" tablet, I’m convinced he’s wrong on the latter.

In fact, I believe that Apple will miss the boat if it dogmatically holds out against the in-between file format — the way it missed the 1990s PDA boomlet by sticking to the overweight, oversized and overpriced Newton.

In October, Jobs directed 4 criticisms at the avalanche of tablets expected this year. Two were at the 7" form factor. Here are excerpts from the Seeking Alpha transcript:

Second … a seven-inch screen is only 45% as large as iPad's 10-inch screen. … Well, one could increase the resolution of the display to make up for some of the difference. It is meaningless, unless your tablet also includes sandpaper, so that the user can sand down their fingers to around one quarter of the present size. … There are clear limits of how close you can physically place elements on a touch screen before users cannot reliably tap, flick or pinch them.

Third, every tablet user is also a smartphone user. No tablet can compete with the mobility of a smartphone, its ease of fitting into your pocket or purse, its unobtrusiveness when used in a crowd. Given that all tablet users will already have a smartphone in their pockets, giving up precious display area to fit a tablet in our pockets is clearly the wrong tradeoff. The seven-inch tablets are tweeners, too big to compete with a smartphone and too small to compete with an iPad.
Kindle Wireless Reading Device, Wi-Fi, 6" Display - with New E Ink (Pearl) TechnologyMeanwhile, for the past three years Jeff Bezos has been selling millions of specialized 7" black & white tablets (which he calls “Kindle”), while Barnes & Noble, Samsung and various others will sell than more than a million 7" color Android tablets in Q4 2010. (Samsung already sold about 600,000 in its first month.) In the Black Friday newspaper ads, I counted nine different tweener tablets or e-readers — excluding the Kindle and nookColor — and the Galaxy was mentioned more often than the iPad.

The iPad has a screen that rivals the resolution of small laptop (or a netbook) with its 9.7" LCD, while the B&N nookColor and the Samsung Galaxy offer a screen in a 7" form factor. The smaller size brings a smaller weight and price: the nookColor is half the price of the WiFi-only iPad while the 3G Samsung is essentially the same price as the 3G iPad (but with a camera).

Steve Jobs posits a chasm between the smartphone and laptop/tablet form factors, and that his two extremes are the only ones that are viable:
ModelScreenResolutionWiFi Price3G Price
Apple iPod Touch3.5"640x960$229
Amazon Kindle6.0"600x800$139$189
B&N nookColor7.0"600x1024$249
Samsung Galaxy Tab7.0"600x1024$600
Apple iPad9.7"768x1024$499$629
However, a 7" tablet can be held with one hand, walking around and is roughly the dimensions of a paperback book. It works pretty well for reading most web pages and certainly for watching a 480x360 YouTube video.

After trying to read web pages on an iPhone and a Palm Pre, I can’t ever see using one again for anything other than an emergency. Dunno, maybe it’s being farsighted (+1.5 correction for reading) and this is not an issue for their core teen market.

Now Steve sells laptops with screen ranging from a 11.6" to 17" diagonal size and prices from $1000 to $2300. In marketingspeak, that’s segmentation — trying to avoid leaving any needs unmet.

I’m guessing that Steve’s would be that laptops are different: it’s possible to provide pointing and data entry for all these sizes for a laptop but not for a tablet. Since the 7" virtual keyboard is clearly superior to the 3.5" iTouch/iPhone keyboard, the barrier is the pointing experience.

There is a very real difficulty of hitting tiny hyperlinks in 8 point font with a fingertip. My tween (with much smaller fingers) complained about it tonight with my nookColor, and it’s been an ongoing frustration since I brought the mini-tablet home.

However, if Steve doesn’t sell a 7" tablet, many other people will — most of them undercutting the iTab’s price point. Maybe they won’t have 100,000 apps but there will be thousands of Android apps — including apps from the major media companies (Facebook, NYT, Time etc.) that will probably be just as good in the 7" size as in the 9.7" size. And a $200 color tablet will reach a lot more people as an impulse buy than a $400 one.

One of Steve’s other comments was about the usability of the products based on Android 2.1 or 2.1 and it appears he was right. More later.

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