You see them everywhere, from bustling coffee shops to dimly lit corner bars. People use them to read ebooks, catch up on the latest news, and post messages on Facebook walls. Since its debut in March of 2010, Apple’s iPad has garnered nearly 90% of the tablet market, with nothing to indicate that the company plans to relinquish any of its dominant market share. That is, until recently, when Google and Microsoft made announcements concerning the introductions of products that will directly compete with Apple’s iPad.
The iPad ushered in a new era of wireless computing. The success of the iPad derives as much to its business model as it owes to its product novelty. Apple owns and operates the entire iPad production process, from design ideas to distribution. Apple designs the iPad’s hardware, operating system, applications, and accessories. Since Apple controls every facet of the process, each component seamlessly comes together to produce the most popular tablet on the market. While Google and Microsoft have tried to compete with the iPad, their disjointed production systems have produced products that consumers deem inferior to the IPad. However, both Google and Microsoft have altered their production strategies.
The New Google and Microsoft Tablet Paradigm
Google and Microsoft have introduced measures that change their disjointed tablet production processes into a process that both companies control from start to finish. Both companies have taken control of the most essential element-hardware-rather than allow third party vendors to produce hardware components. The result has been the recent introduction of Microsoft’s Surface tablets, of which one version runs on Windows 8, while the second version runs on Windows RT. Microsoft designed, produced, and assembled both Surface tablets, instead of relying on their traditional hardware partners, such as Dell and Hewlett-Packard.
During its I/O conference beginning on June 25, Google will introduce its new tablet. While the company has offered the premium Nexus line of tablets, other companies have always produced the hardware components. HTC manufactured the first Nexus tablet, followed by Samsung, which has produced the last two versions. Now, Google will produce a tablet that mirrors the iPad and Surface business models. Google will control every facet of the product process and sell the Android tablet on its Google Play Store.
The business model changes implemented for the new Google and Microsoft tablets will have lasting implications for the iPad. While the iPad may become the generic word that describes tablets, Google and Microsoft will inevitable erode some of Apple’s huge table market share. The question technology analysts pose id just how much market share Apple will lose. The answer to that question will hinge on how Google and Microsoft price their new tablets.
The Google Android Strategy
Sources cited by DigiTimes claim Google plans to market nearly 600,000 Android tablets sometime in July. An additional 1.4 million Android tablets should be ready for sale by the end of 2012. Google has not finalized a price for the tablet, which may be how the company differentiates its tablet from the iPad. Initially, Google settled on a price of $249 for the Android tablet, but DigiTimes reports the Android tablet may go for as low as $199. Possible hardware manufacturer partners include Asus and Motorola, which Google is in the process of acquiring. Asus gets the first shot of co-branding the Android tablet with Google.
In addition to offering its tablet at one of the lowest prices in the market, Google also will leverage its vast resources by selling the Android from its own online store. Google’s decision to focus on Wi-Fi as the only way to connect Android tablets to the Internet helps keep costs low, thus allowing Google to undercut competitor pricing strategies. If Google’s Android has a display that pleases consumers and it possesses a long battery life, the new tablet should give the iPad a run for its money.