Why Apple Will Benefit From an Android Tablet Influx
This fall, we will see an influx of low-priced, 7-inch Android tablets, but too many options may steer confused consumers toward the rumored iPad mini.
While perusing the tech ads in the Sunday paper, I found some no-name brand, 7-inch tablet for $129 and another for $179. Both were fully functioning Android tablets that were capable of running most apps.
Recently, Barnes & Noble also from $199 to $179. Now this may have been done to clear inventory in anticipation of a new model, but this move could also signal a trend in cheaper 7-inch models trying to compete with Google's hot , which sells for $199. In fact, I think that $179 will be the next sweet spot for 7-inch tablet pricing in 2013.
Shortly after, I got an email from a Taiwanese ODM that for some reason thought I was interested in buying tablets in volume. It shared its manufacturing prowess with me and said that it could create a 7-inch tablet for under $100 if I was interested. Actually, this was the third such email I have received, but all have come from different companies.
On my nightstand, there are eight 7-inch tablets and two 10-inch models that I have been testing. All are Android models that reside alongside my iPad, my most used tablet overall. As I look at this pile of tablets, it becomes clearer to me that tablets are the next PC. We will be getting a glut of them from big-name brands and no-name brands alike starting this fall.
The good news for Google is that most of them are Android-based tablets. The bad news is that most run older versions of Android and Google's inconsistency across all of these models just adds to consumer confusion. This confusion might be good news for Apple.
In the recent Apple versus Samsung trial, Samsung was forced to present documents to the court that showed that over a two-year period, it had only sold 1.4 million tablets. In that same period, Apple sold more than 80 million. Apple owns 70 percent of the market share in tablets and Samsung has barely 9 percent, according to iSuppli.
There are widespread rumors that Apple is about to to compete with all of these 7-inch Android tablets. This is still speculation, but my company is seeing hard research that suggests potential Android tablet consumers would think hard about upgrading to an iPad mini, even if it costs $100 more, because Apple is a consistent company with excellent service.
The other dynamic in play that bodes well for Apple is that when consumers get confused by the dozens of Android tablets, they look for a product that is simpler to understand and represents a more stable platform, like the iPad.
Interestingly, all of my colleagues in the tech research business think that if Apple rolls out a smaller iPad under $300, it would be a monster hit and have a negative impact on 7-inch Android tablets. My Taiwan contacts also echo the same sentiments.
An even worse problem for Android tablet manufacturers is that they would be forced to drop prices to compete and the margins would shrink even further. That could really shake things up at the low end. In fact, the only companies that could keep pushing out 7-inch tablets at $149 and above would be Amazon and Google, which can tie future sales and advertisements to an amortized model.
The only bright spot in this is that consumers will have the option of buying very low-cost tablets that will introduce them to the tablet lifestyle. It would not surprise me, though, if the consumer confusion caused by the Android tablet glut results in Apple becoming the big winner in small tablets.