3 Surprises from the Tablet Wars
Demitri is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Google (NASDAQ: GOOG) and Microsoft (NASDAQ: MSFT) are entering the tablet business. While I like to think that I just broke that news to you, I'm pretty sure this doesn't come as a surprise. After all, it's not as if both companies didn't do everything possible to make sure you heard about their new products.
Microsoft took to the marketing step favored by Apple (NASDAQ: AAPL), that of whipping the media into a speculative frenzy by inviting journalists to a secret "major announcement" that they couldn't afford to miss. Google opted for its own "low key" approach, dropping skydivers from an airship above the audience at its own tablet announcement.
So, the secret is out.
But neither announcement was a true surprise. Google, jockeying to hold search dominance as mobile devices proliferate, clearly needed to get into the tablet market. The company can't afford for its Android operating system to languish at niche status in this fast-growing sector.
For Microsoft's part, let's not forget that it was Mr. Softee that unveiled the first tablet PC back in 2001. And it was another Apple device, the iPod, that last convinced Microsoft to join the hardware industry with its own product, the Zune. As Mark Twain said, "history doesn't repeat itself, but it does rhyme."
Still, now that the major tech players have all shown their tablet cards, there were a few genuine surprises that shouldn't be lost in all the theatrical fanfare.
Surprise #1: No one took a direct swipe at Apple.
Despite the overzealous application of the label "iPad Killer" by the media, neither tablet actually takes aim at Apple's tablet.
Instead, Google's Nexus 7 tablet, sized at just 7 inches and priced at $199, is clearly aiming at Amazon's (NASDAQ: AMZN) Fire tablet and the lower end of the market where the profit margins flow from content consumption. Microsoft's Surface, meanwhile, has a feature set that directs competition at the higher end, toward the ultrabooks and PCs produced by Dell and HP. Both new tablets look set to broaden the tablet industry, not to try to displace Apple in its dominance over it.
Surprise #2: Microsoft has some flair.
In light of Microsoft's past struggles against Apple with the Zune, many assumed that the company's tablet response would be a similarly uninspired "me too" device. But the Surface looks like the product of some real design commitment, and includes innovations -- like a touch-sensitive keyboard/cover -- that seem destined to push the tablet category forward.
While there is plenty of information that we still don't know about the Surface, including price, battery life, and cellular capabilities, it appears to be a solid entry into the market that may win some commercial success.
Surprise #3: Everyone agrees: hardware and software integration is key.
Before the tablet industry's rise there was a big disagreement in board rooms around Silicon Valley. Apple argued that tightly controlling every aspect of the user experience -- from hardware to software -- was critical to delivering a solid product. Others, including Google and Microsoft, espoused the open architecture model of licensing software out and letting the hardware makers fit it to their own products. Microsoft and Google's tablet announcements should put that debate to rest. Integration won.
The reason is that as the PC got smaller and simpler and the user experience became more direct, aspects like design, battery life, responsiveness, and usability came to trump the only thing that manufacturers could deliver: an ever-growing list of features. Unfortunately, they could deliver those features only at the expense of what really mattered to the user. What good is 4G speed anyway if it guts the battery and turns my device into a paperweight after a few hours?
No surprise: Apple still leads.
Innovative hardware design, software responsiveness, and the end-to-end delivery of a stellar user experience. These are areas that only Apple commands in-house. And I don't see the new tablet makers achieving that trifecta anytime soon. The Nexus 7 may take share from Amazon, and the Surface could complicate things even more for Dell and HP, but Apple's lead seems secure. That's why if Apple still dominates the tablet industry two years from now, I wouldn't be at all surprised.
SigmaSwan owns shares of Apple. The Motley Fool owns shares of Apple, Amazon.com, Google, and Microsoft. Motley Fool newsletter services recommend Amazon.com, Apple, Google, and Microsoft. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. If you have questions about this post or the Fool’s blog network, click here for information.
