I try to keep a level head about Apple products. I own several, but I also own plenty of non-Apple stuff as well (I use a PC! Can you believe it?!).
This whole tablet movement has been fascinating to watch, though, and Apple’s been navigating the minefield impressively. It’s setting up some mines along the way, which helps, but you get to do that when you’re the first one through the minefield.
In the days just before the first iPad was first announced, some wondered whether it’d run a full-blown Mac operating system or a scaled-up version of the iPhone’s operating system.
Turns out, it was the iPhone operating system. Some people scoffed, saying $500 was too expensive for a giant iPod Touch, but most regular consumers didn’t care either way because the iPad was new and cool. And little did anyone know that the $500 price point would be so hard to beat.
So Apple had set the tablet bar: starting price of $500, mobile-ish operating system and—perhaps the most important part—the ability to run thousands of apps that many smartphone owners had already purchased.
Sure, the apps were pixel-doubled and looked a little silly blown up on the iPad’s big screen but their mere existence on the iPad at the time of its launch did two things: First, the apps gave iPad owners something to do while developers worked on iPad-specific versions of apps and, second, it kept iPhone owners from getting all bent out of shape about having to purchase duplicate apps for their iPads. The brilliance was that most iPad-specific apps looked better than their iPhone counterparts, so people ended up buying the iPad versions anyway. But they didn’t have to.
At the iPad 2 unveiling, Apple made a big deal about the fact that there are more than 65,000 iPad apps available. They didn’t say how many were good apps—not that they would—but goodness is subjective, numbers are not, and so numbers win when it comes to how people think of mobile app stores.
But after a certain point, the numbers don’t matter any more. The Android platform has enough apps now that nobody would really care if Apple had a billion and Android had a million. As long as enough of the apps are good, then people will buy into whatever platform those apps are on.
The thing that tablet makers lose sight of—or that none of them seem to want to acknowledge—is that apps dictate the success of the hardware, not the other way around. This is a relatively new phenomenon for mobile products.
You used to buy a phone because it looked cool and made decent calls—maybe it had a color screen or any of a number of other hardware features. Now you buy a phone because of the apps it can run. Maybe YOU don’t, but most of the general public does. There are phones out there that can run circles around the iPhone by featuring faster processors and expansion slots and bigger screens and replaceable batteries (and the ability to make phone calls), but the iPhone has cool apps so people want it.
The same principle applies to tablets now, too.
A low starting price for a given line of tablets is only slightly less important than quality apps—only slightly. It’s still very, very important. But if Apple priced the iPad at $100 higher than comparable Android, BlackBerry or HP tablets, it’d still probably sell plenty of them because there are enough good iPad apps to lure people in.
The big (huge, gargantuan) problem for these competing tablets is that they’re all coming in priced way higher than the $499 base-level iPad, and they’re often tied to cellular carriers if there’s any chance of getting the prices down anywhere near $500.
The Motorola Xoom Android tablet is a perfect example. It costs $800 unless you lock yourself into a two-year data contract, which then only gets the price down to $600. From a hardware standpoint, like several Android phones, it could run circles around the first iPad and handily beats the iPad 2 on several fronts.
But the first iPad now costs $400 ($350 for a refurbished unit with the same warranty as a new one) and it’s got access to all those wonderful iPad apps. And the iPad 2 still only starts at $500. Ask most regular people if they care that the Xoom has a cellular connection, double the storage of the base-level iPad, expandable memory, or an HD display. It costs $800 and has no apps.