BGR reported today that Android tablet vendors are reportedly very concerned over rumors that Apple is working on a 7.85-inch “iPad mini”, or is it an “iPod XL”? Android manufacturers, such as Amazon with their Kindle Fire, currently have a monopoly on 7-inch tablets. Apple already dominates the tablet market as a whole, boasting a 74% market share in the tablet market in 2011, but the 7-inch niche carved out by Android manufacturers has allowed them to survive and thrive within this space. It’s difficult now to quantitate the impact a mini iPad would have on Android tablet vendors, but one important distinction to me is the price point of the two offerings. Apple may very well introduce a smaller tablet to compete with Android, but it won’t be $199 – certainly not when the iPod Touch is priced at or above $199. An iPad mini would also be complete market cannibalization on Apple’s part, most people who are interested in the iPad mini are going to be people who already own an iPod or iPad and prefer the 7.85-inch display to current Apple offerings. Many Android fans are hoping that 2012 will be the year of the Android tablet, backed by Google’s announcement of a 7-inch Nexus tablet to debut in Q2.
Regardless, if Apple does choose to enter this space, it is likely that competition will intensify even further. Apple’s shareholder’s already aren’t too pleased that are being forced to make significantly lower income on the latest iPad, and, if they choose to enter the waters with a 7 inch tablet offering to compete against Amazon and Google directly, it’s likely that you and I – the consumers – will be the direct beneficiaries of such heated competition.
How do you think a 7.85-inch Apple tablet will impact the future of Android Tablets?
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Android has become the choice for non Apple fans. Be it affordability or even plain choice, the fact that all other users ( non Apple ) have a common platform in Android will see huge growth and synergy between google and Nokia and Motoraola and Huwai etc – Apple needs to watch this space. 2012 will see Andriod take off like a rocket in Africa esp SA – a continent that Apple has ignored. Moral of the 2012 story for Apple is gonna be….Dont keep your all your apples all in one basket!
That’s true, Apple’s shareholders’ aren’t going to stand for cutting margins even further to enter a space where Apple has shown no history of being successful. The one tablet Amazon should fear is the upcoming Nexus tablet, as it offers Google services & superior performance at the same price.
If Apple introduced a 7″ tablet and priced it reasonably ($250-$299) I see no reason that Android tablets would ever take off. Already tablet manufacturers have proven that they have no intention of selling reasonably priced tablets. For instance, Motorola’s Xoom once sold for $599 when the far more successful (and app-backed) iPad sold for $499. What was Motorola thinking? How could the Xoom possibly compete with the iPad, with its rich ecosystem of apps, books, movies, etc? The only reason the Kindle is succeeding wildly is due to the price and that it’s backed by Amazon, with its App Store, book store, movie store, etc.
And still the tablet manufacturers overprice their tablets. It’s like they haven’t learned anything from the market.
If you look at the margin for tablets, you will see that the tablets are not really overpriced. The Fire sells BELOW cost – in case you did not know, that means it is being sold at a loss. The other 10″ tablets (priced near 400) are not making much money, if any. That has to do with the costs of making them and the low numbers being sold. I think you will see some change to that as the market matures. Manufacture costs will decrease, R&D costs will depreciate, and prices/performance will stabalize. Right now, there are just too many alternatives. If the “other” tablet makers could be a little more standard, then the rest of the eco-system could stabalize and grow. That would increase the potential user satisfaction and increase sales and upgrades, therby driving a larger market share.