Shortly after its introduction, Apple’s latest iteration of the iPad continues to lead the pack, easily outselling peers that include newcomers from Amazon and Barnes & Noble. The updated slate is likely to find an audience both in the consumer market and in enterprises as Apple continues to blend software, a strong media ecosystem and solid hardware features. Some may argue the new iPad is just another minor set of updates, but the changes in this latest iteration of the device should have other tablet makers, and perhaps even personal computer hardware companies, concerned. Let’s examine why.
What’s improved in the new iPad
On the surface, the new iPad looks similar to the old one: It’s the same form factor, just slightly thicker. Inside, however, are key improvements on an already successful and proven tablet. The 9.7-inch screen now supports four times the number of pixels, thanks to a 2048 x 1536 resolution. That works out to a whopping 3.1 million pixels, or roughly 50 percent more pixels than the 2 million on a standard HDTV set.
The new display will benefit from the 5 megapixel camera sensor, too. It’s the same camera Apple introduced with the iPhone 4, and it’s capable of capturing 1080p HD video at 30 frames per second. To capture and drive all of those pixels, Apple upgraded the A5 processor in the iPad 2 to include four graphics cores in the chip.
Wireless capabilities are improved in two ways. The new iPad isn’t the first LTE 4G tablet on the market, but it’s the first one that doesn’t require a contract. Just as with the 3G iPad models, customers can pay $130 extra for integrated mobile broadband support and then buy a set amount of data in any given month. And with the addition of Bluetooth 4.0, Apple’s new tablet is the first Bluetooth Smart Ready tablet, able to support new wireless gadgets and health monitors.
The continued use of month-to-month broadband combined with the device’s updated display could appeal to enterprise workers as well. The lack of a data plan contract can help keep employees connected without breaking the IT budget. And with a higher resolution display, remotely accessing a desktop computer through the iPad or holding video conferences becomes more effective too.
How Android has tried to compete
Makers of Android tablets have taken the opposite approach than that of Apple, with a more PC-centric view of tablets that focuses largely on hardware specifications. Why? Apple already set the bar high for an overall positive tablet experience with iOS and its leading ecosystem. That leaves hardware as a potential differentiator to compete, not to mention that most Android tablet makers are also PC manufacturers. To this point, many of the Android tablet efforts have pointed out comparatively better hardware: quad-core chips, high-resolution displays up to 1280 x 800 and support for wireless gaming controllers.
This approach hasn’t worked, however. Even with all models combined, the pure Android tablets lag behind Apple’s iPad in terms of sales. They hold 27 percent, while the iPad still accounted for 61 percent of the market in 2011, according to iHS. The saying from last year that “there isn’t a tablet market; there’s only an iPad market” still rings true.
In fact, the only other tablets that have made a dent in the overall market are those that share an element with the iPad: a pleasing user experience paired with an appealing ecosystem of apps and digital media. Amazon’s Kindle Fire and the Barnes & Noble Nook tablet are the smaller success stories, accounting for 21 percent of all tablet sales in the last quarter of 2011. Both are offered at low prices — $249 or less — which also adds appeal. And the same holds true of the iPad: As the hardware improves, the price remains the same and it provides a superior user experience.
What do these improvements mean for competitors?
With the new hardware improvements, Apple has in many ways removed the “third leg of the tablet stool” from Android tablets. Those three legs are hardware, software and user experience. Android devices haven’t competed well on the latter two legs, and now they have to contend with the first, which is vastly improved in the new iPad. This means we will continue to see a multitude of new tablets as Samsung, LG, Toshiba, HTC, Motorola and others iterate quickly to try to outdo the new iPad’s hardware.
Such an approach has limited upside. Offering a constantly changing line of tablets in an attempt to outdo the new iPad brings two challenges.
The first is that buyers don’t want to make an investment on the latest and greatest mobile device only to have a slightly better one hit the market a few weeks or months later. This issue has been seen in the smartphone market time and again, most recently with the Motorola Droid Razr Maxx, which followed the Droid Razr by two months. With a newer model available, the $299 Razr dropped to $199 to make room for the Razr Maxx at $299. Adding insult to injury, the Razr Maxx offered nearly double the battery life over its predecessor, and Razr owners missed out on that benefit.
The second challenge is how tablets are sold, at least in the U.S. To date, all tablets with mobile broadband are sold by carriers, who subsidize the hardware and require a two-year minimum contract. The lone exception is Apple’s iPad, which can be bought at retail locations, online or directly from Apple. No contract is required with the iPad, because Apple negotiated with carriers to allow for a pay-per-use model on a monthly basis.
This is key, because it works against a constantly changing Android tablet product line. Once consumers or businesses purchase an Android tablet, they have essentially committed to keeping the device for 18 to 24 months or paying an early contract termination fee of up to $350. The subsidized hardware model is diametrically opposed to how the Android tablet makers are best suited to compete against the iPad.
Can the iPad be dethroned?
Not in the short run. The non-Apple tablets best suited to continue gaining market share are those that demonstrate similar value in terms of usability and ecosystem: namely, as mentioned above, the Kindle Fire and Nook tablets. Over time, however, there is hope for Android makers and even Windows 8 tablets, which are likely to hit the market before the end of this year.
Android tablet makers should focus on reducing their product lines while also leveraging Google’s new Android 4.0 software. This version, known as Ice Cream Sandwich, is much improved over Android 3.0, which is the version most Android tablets run today. Personal preferences will vary, but Ice Cream Sandwich is the closest version to date that compares well to Apple’s iOS software. That will help solve the usability problem, but it’s going to take tablet sales to attract more developers to build Android tablet apps. The only way that can be sped up is if, perhaps, Google provides fiscal incentives to developers.
Microsoft’s Windows 8 is still the dark horse here, as RIM’s BlackBerry PlayBook has continued to falter, even after drastic price cuts, updated software and new accessories. The Windows 8 Consumer Preview has offered the first hands-on glimpse at how Microsoft’s Metro UI will be on a tablet, and it’s promising: It’s a fresh, different touch experience that can be just as effective as the iPad’s iOS. There are still a number of hurdles for Microsoft to overcome, however, before its tablets are ready to compete with the new iPad.
By trying to offer both a legacy experience with the Aero desktop interface and the new Metro UI, Microsoft may create some confusion among buyers. There’s also an open question of what apps will work on Windows 8 tablets powered by x86 chips vs. those powered by ARM chips. And to date, we have seen no actual hardware products other than relatively thick, large slates that are bulkier than the iPad.
However, Microsoft has a strong foothold in enterprises, and it could be here that Windows 8 tablets take off. Without a true tablet alternative powered by Microsoft to date — save for tablet PCs in certain vertical markets — companies have had no choice but to turn to the iPad. If Microsoft achieves the goals it set forth with Windows 8 in the tablet space, enterprises could bolster demand for tablets running on Microsoft’s new platform. That could temper demand for Apple’s iPad in the workplace for companies that want simple and deep integration into Microsoft’s business software and server products.
IPad is still the king of tablets and will be for some time
For now then, the iPad will continue to dominate tablet sales, even with what some are calling incremental hardware upgrades. The new display alone is a game changer that will have competitors scrambling. Adding a similar display to an Android tablet, however, won’t have much impact on boosting sales. Since it debuted in 2010, the iPad has offered a successful blend of hardware, software and user experience in a way that few tablets have.
The game isn’t over yet, however. If Google can aggressively entice developers to focus on the Android platform and bring in new media content partners, Android tablets could see wider appeal. Likewise, Microsoft hasn’t yet entered the game. First looks at Windows 8 plus the inclusion of running Windows on low-powered ARM chips could be game changers within the next year.
