Two weeks ago, Apple introduced the iPad, a “tablet”-style computer that is essentially an overgrown iTouch. It provides portable computing capabilities, in a device that is larger than a smartphone. This product introduction is important, but the importance of the announcement has less to do with the iTouch, iPhone, or iMac, than it does with the Amazon Kindle.
Let’s take a look at what this announcement means you’ll see from hardware manufacturers moving forward. Next week, we’ll discuss what the implications are for software developers.
It isn’t like the concept of a tablet-style computer is new. Microsoft has been promoting tablet-style computing devices for years, with very limited success. What is new is that people are now starting to buy them.
Last year’s holiday season featured tablet-style computing devices as one of the hottest gift categories. But people didn’t buy them from Apple, Dell, or HP – they bought them from Amazon, Sony, and Barnes and Noble.
Amazon isn’t saying how many Kindle readers they’ve sold, but they have stated that holiday season sales shocked them compared to original sales expectations. Amazon did report though, that on Christmas day they sold more downloaded eBooks than the old fashioned ones made of paper.
eBook reading has become a “killer application” – software so compelling that people will buy a brand new device just to have access to it. PC manufacturers must be drooling at Amazon’s performance. If people will buy a device that only runs one application, then they certainly must be willing to buy similar devices that can run many applications.
Is eBook reading software exclusive to devices from Amazon, Sony or Barnes and Noble? Hardly. According to Flurry Analytics, by September of last year, the number of new eBook applications appearing on Apple’s App Store surpassed the number of new game applications. In October, 2009, 20% of the applications submitted to the App Store were book apps or dedicated books. One of the eBook reader applications available from the App Store is even from Amazon itself.
If you followed Apple’s iPad announcement, you probably are aware that the device was panned by critics. The iPad does too little, features some of the same limitations as the iTouch that become even more pronounced on a more general purpose computing platform (i.e. no Flash support for web browsing), has too little memory, and costs too much. The iPad has “version 1.0” written all over it.
Expect Apple to come out with future versions that are more functional and less expensive.
More importantly, expect HP, Dell and all other PC hardware manufacturers to come out with similar devices. Microsoft even has a tablet device, code-named Courier, in development, although no release plans have been revealed. Expect them all to provide eBook reading capabilities, multi-touch support like the iPhone has always had and which Microsoft now supports in Windows 7.
Tablet computers are a new category that offers little real market experience for all the computer manufacturers to draw on to determine what will really make them sell. Plan on seeing a few “ducks”. Like ducks, who can both swim and fly, but do neither exceptionally well, these products will do your everyday computing and web surfing, and will have the communication capabilities found in smartphones. Whether they do any of it well enough for people to spend money on the device is yet to be proven.
Like the initial iPad, plan on all of these devices at first to have a little less functionality at a price that’s a little too high for everyone to rush out and buy it right away. Expect prices to drop and functionality to rise.
What will be interesting to watch is what happens to companies like Amazon or Barnes and Noble. The classic business of these companies is to sell books. Their present hardware devices encourage that, with some extra hardware revenue generated in the process. Will their devices become more functional? Less functional with commodity pricing to encourage wider acceptance and increased downloads? Will they deemphasize their hardware and strike software and distribution deals with the PC manufacturers? One thing is for sure – the holiday season at these companies in 2010 will be very different than it was in 2009.
