Tablet Wars or Massacre?
February 1st, 2011, 11:46am by JakeSaw the news bit about Samsung not really selling 2 million Galaxy Tabs, and then the bit today about the 16% return rate for the 7″ tablets. The Xoom and Playbook are getting a lot of buzz right now, will be interesting to see if either can fare better than Samsung. Of course, there remains a dark horse in this 1-horse race, staring up from the deepest, darkest chasm of despair.
Will the battle be joined by Motoroloa, RIM, Samsung or HP/Palm, or will Apple run roughshod over the tablet market the way Microsft dominated PCs for 2 decades and the iPod rules the mobile music market?
February 1st, 2011 at 12:55 pm
Yeah, I was skeptical about the 2 million number (shipped, obviously, not sold through to users). Verizon reported activating 86k tablets in the 4Q (probably all Tabs), and AT&T reported like 450K (probably almost all iPads). So I didn’t see how it added up to 2 million. Actual sell through being “quite small” per Samsung’s admission probably indicates 700K or so in the hands of consumers would be my guess? That already includes a huge proportion sold to the patriotic Korean faboys 🙂 Of course, Apple suffers from the same issue, reporting sell-in. The Tab didn’t seem like a real competitor anyway, especially once the Honeycomb tablets were revealed. Interesting to note, Motorola guided to 20-23 million smartphones+tablets for the entire calendar year 2010, so I think their expectations of the Xoom launch could not be to high. Probably worth noting that the vast majority of iPads sold are wifi only (ASP for 4Q was around $644).
I think if I were to buy a tablet, it would be an iPad. I just don’t see any reason why I’d want one without app support. BTW, I no longer regret the netbook purchase… As a second computer/device, an iPad is better than a netbook. But as a primary computer, the netbook is better than an iPad 🙂
February 1st, 2011 at 1:53 pm
Turns out that the Samsung CEO described sales as “quite smooth.” Nevertheless, I think it’s safe to say that far less than 2 million have been sold to customers, probably less 1 million, well under 500,000 stateside.
The iPad is the best option available TODAY. If form holds, HP/Palm will announce the first tablet arguably better than the Apple offering, then 2 days after release it will be matched by Apple, which combined with the strength of the applications makes it the obvious preference. 1 year later, HP/Palm will double the RAM while Apple re-reinvents the market.
February 6th, 2011 at 11:47 pm
OK, now the Xooooooom. Per Pyslent’s favorite news source, reports are that the Xoom will cost $800 and the WiFi won’t even work until you activate the phone with Verizon. Ooph. While some compare the price to the $730 iPad (32GB w/ 3G), that’s not particularly relevant. Apple has obviously priced everything above the entry model to ensure solid margins, thus $100 for an extra 16GB (which must run Apple ~$10). Ditto the $130 for 3G, since Amazon can do the same for $40.
So if you don’t want 32GB and don’t need 3G, you’re left with the choice of a $800 Zoom or $500 iPad. I mean, it’s not even a close call. Motorola might end up selling more Atrix laptop docks.
February 7th, 2011 at 1:48 am
Yeah Moto is obviously not going for market share with pricing like that. To a certain extent, I think it makes sense to try to fleece the early adopter, since they might have a once-in-a-lifetime first mover advantage. Now that Honeycomb is available to other OEMs, the price competition will be much more fierce in 3 months.
Rumor has it that Motorola has 700-800K units in initial sell-in. It wouldn’t surprise me if Apple themselves barely sold that many at the >$730 price point in the MRQ. In the states, they probably sold 400K 3G iPads altogether.
February 7th, 2011 at 10:16 am
It did occur to me that one major advantage Apple, RIM & HP has over Samsung, Motorola & LG is that the first three can afford to take a major hit on margins or even sell at a loss to establish market share. For Apple, it makes sense to sell the entry-level iPad at 5% margins initially as it helped establish the dominance of the platform. HP might decide to take a small loss on each unit sold to promote webOS… a $50 hit on a million units is something HP could absorb. But Motorola, Samsung… why bother taking a loss, as they do is help establish Android for the next manufacturer?
February 7th, 2011 at 10:23 am
For some reason, Pyslent thought my last comment was SPAM. I retrieved it from the spam dump.
February 7th, 2011 at 12:08 pm
Agreed, for an Android OEM each sale is just that, a sale. It builds very little brand loyalty, does not really establish a platform, no sustainable competitive advantage. I think the way the top Android OEMs have leap frogged each other every quarter (HTC, Motorola, Samsung, etc) is going to be the norm. Google will be kingmaker and choose a partner for each big OS release, and the others will just wait their turn. I think the Nokia honcho said it best when he compared Android OEMs to little Finnish boys that would intentionally pee in their pants to stay warm temporarily.
If you have a chance at a differentiated platform, like HP now has (and Nokia hopes they have in Meego), might as well take a shot. The risk reward seems pretty favorable. If it doesn’t work out, what have they lost? Just a few lost sales. They can adopt Android in 2 years and catch up to the pack immediately.
February 7th, 2011 at 12:50 pm
Re-reading my post, it becomes apparent that the grammar checker was probably responsible for the spam flagging.
February 7th, 2011 at 2:31 pm
I understood it, I think…
February 25th, 2011 at 4:34 pm
Motorola’s Xoom launch yesterday was pretty low key– no reports of sellouts or long lines. Probably Apple’s “coincidental” announcement of their upcoming iPad2 announcement took a lot of wind out of Xoom’s sales.