Thankfully, I’ve never been in a perfect storm. I have seen a movie about it, but the worst storms I’ve encountered were of the lightning, thunder and torrential downpour variety when I attended college in the Midwest. I came pretty close to a tornado once, but it missed us by 20 miles. There are various ways of describing a perfect storm, but it usually refers to a confluence of multiple types of weather conditions converging to create a “perfect storm” that has a huge impact on anyone in the storm’s path.
This fall, the tech market will have a perfect storm of its own as three major technologies and industry forces converge to deliver a whole host of new products for consumers.
This could be either a very good thing or a bad thing, depending on who you are. Techies will have dozens of new technologies to buy that enhance their digital lifestyles, and to them this will be a good thing. But for mainstream consumers, so many new products and gadgets will be coming out at the same time that they’ll have almost too many choices to deal with. In many cases, this could cause a lot of confusion.
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The first major products that will have a big influence on the market is the next generation of low-cost Android tablets. This will be led by Google, which is expected to jump directly into the tablet market with a 7-in. tablet of its own. We hear that it will be an Android tablet with the most recent version of Android (known as Jelly Bean) and that it will most likely be priced around $199 to compete with Amazon’s Kindle Fire. But I have heard that it could be priced as low as $179 as well. Google could announce this tablet as early as its development conference in late June.
Google getting into the tablet market is a big deal. It means the company will be competing with its own partners and customers such as Samsung, ASUS, Acer, Lenovo and others. And Google getting into the market is an important move, as it signals that Google is willing to put its own marketing muscle behind Android tablets to try to and help them gain market share. To date, Android tablets have not done well, and this thrust from Google means that users will have a lot of Android tablets to choose from this fall.
We also expect Amazon to continue its push in the tablet market with a new 7-in. Kindle Fire, and many believe the company will also bring out a 10-in. model that could be more competitive with Apple’s iPad. And since Amazon subsidizes its tablets by selling digital content and products from its online store, the 10-in. model could be priced as low as $299, according to sources I’ve talked to. And we hear Samsung has a stellar new tablet it will also launch in Q4, which will only add to the amount of Android-tablet choices that will be available this fall.
The second big thing will be the push by Microsoft to introduce two versions of Windows 8, the company’s new operating system with the Metro touch user interface. This new OS will be especially important for the tablet market, and by late October we should have dozens of new Windows 8 tablets available in two distinct flavors. The first will be tablets based on Intel’s x86 chipsets. This is important because it means that you will be able to run existing Windows apps on these tablets. The one problem with this is that existing apps will not be Metro- or touch-enabled, which means that to use them you will need a tablet that also has a stylus. Microsoft is pushing software vendors to build new apps that are touch-enabled to take advantage of the Metro UI, but at launch we expect less than 10,000 Metro apps for Windows 8 will be available.
The second flavor will come in Windows 8 tablets that use ARM processors. In this case, no existing Windows application will work on these machines, but these tablets have the advantage of having chips with extremely long battery life. Software developers are also being pushed to create dedicated apps for use on ARM-based tablets, but at launch we may have only about 500 apps ready to go on these systems. However, while the x86 versions of Windows 8 should have strong traction with IT users, ultimately the ARM-based Windows 8 tablets may be more important to the consumer market if the software community starts to back it. This is because with the ARM push, Microsoft is actually starting over. It has no legacy baggage from older versions of Windows to deal with, and in essence it gives Microsoft and the software community a completely new palette to work with.
Windows 8 with the Metro UI will also be available for laptops and desktops, but since existing laptops and desktops are not touch-enabled, its impact on these platforms could be limited at first. Microsoft is hoping that PC vendors will start building laptops and desktops with touch screens in the future to take full advantage of the Metro UI; but that may be slow in coming, as putting touch screens on the products adds at least $100 to the cost of these computers. To date, vendors are rejecting these moves as they try to keep laptop and desktop prices low to stay competitive. However, over time Windows 8 will find its way onto all laptops and desktops or at least be available as an upgrade for consumers.
Also, Intel and its partners will make a huge push around Windows 8 Ultrabooks this fall. These are Intel’s new thin-and-light laptops that are similar to Apple’s MacBook Air, and Intel is going all-out to use them to revive the laptop market, whose growth has been somewhat stunted by the iPad. Most Ultrabooks will be priced above $699, so at first they will be bought by a more upscale audience. However, we will also see products that are thin and light with less processing power called Ultrathins debuting this fall as well. These will be in the $399-to-$599 range, thus giving laptop buyers some exciting new form factors to choose from this holiday season.
There will also be a new category of devices introduced around this Windows 8 launch called hybrids. These are tablet-and-keyboard combo devices in which the screen pops off and becomes a tablet (when docked with the keyboard, they work more like a laptop). ASUS’s Transformer Prime is a good example of this hardware design running Android software, but these impending Windows 8 hybrids will be fully Metro touch-enabled. This will be one of the more exciting new product lines we will see this fall, and there’s already a lot of interest in hybrids that marry the tablet and laptop into a single device.
And there will be a third technology push that will also have a big impact on the market. We expect that in October, Apple will introduce a new iPhone. Although nobody knows for sure what this will be, I do expect Apple to deliver a completely redesigned iPhone that is sleeker, more elegant and much more powerful than what the company has on the market today.
Demand for the iPhone is still very high around the world and there will be huge, pent-up demand for the new iPhone in the U.S., as millions of current iPhone users are coming to the end of their carrier contracts. At the same time, we expect as many as 20 new Android and at least four new Windows-based phones to come out this fall too.
There is also the possibility that Apple could introduce a smaller iPad. While this is purely speculative, there are lots of rumors floating around that this is in the works. If so, this would be a game changer and could have a real impact on the tablet market. Amazon set a new price for 7-in. tablets with the $199 Kindle Fire, but if Apple does introduce a smaller iPad, it would also be much cheaper than the 9.7-in. iPad — likely to be priced as low as $299. I suspect that if consumers look at the Kindle Fire at $199 or Google’s low-cost tablet at a similar price and have an option of buying an iPad for only $100 more, a lot of them would opt for the iPad.
These three types of technology products and marketing forces will collide some time between July and October, and set the stage for what will be the most active tech buyers’ market we have ever seen for a Q4 holiday period. Aside from the devices themselves, close to $1.5 billion will be spent on marketing these products to consumers this fall. Consumers’ heads will spin as we’re bombarded with ads for new smart phones, tablets and portable computers. Start your technolust engines now, and get ready for some really cool products this holiday season.