Sunday, May 06, 2012

The tablet makers' dilemma

Last week, DigiTimes wrote that "Android 4.0-based tablet PCs will be the dominant products in the segment in the third quarter of 2012 as most brand vendors will not rush to launch Windows 8-based models until the fourth quarter." The reasons for holding off on introducing Windows 8 tablets are fairly clear:

  • Microsoft had been expected to release Windows 8 in Q2, but it's now looking like it won't be released until Q3 or possibly even Q4. 
  • It will take time for vendors to test Windows 8 and related products for their tablets. 
  • Vendors are suspicious of Microsoft's intentions with the Barnes & Noble deal--is B&N going to become Microsoft's "preferred" tablet vendor in the same way that Nokia is favored for Windows Phone 7 smartphones?
  • Vendors see no reason to rush Windows 8 tablets to market. 
But, will Android 4.0 products be "dominant" in Q3? Not likely. According to Google's Android Developers site, all versions of Android 4 constitute less than 5% of the active Android installed base. That number overstates Android 4's true share because Google bases its installed base numbers on usage of the Google Play website, which only "authorized" devices can access. If the Kindle Fire and Barnes & Noble Nook Tablet and Nook Color were included, Android 2.3.3 to 2.3.7 would have even more market share than the 63.9% reported by Google.

That leaves tablet vendors other than Apple, Amazon and Barnes & Noble in a quandry. Should they continue to invest in Android tablets when, to date, Google hasn't been able to provide a version of Android for tablets that's compelling to consumers? How much hope should they place in Google getting it right with Android 5? Should they follow Amazon's model and fork a stable version of Android with their own user interface, perhaps even going back to 2.3.X?

Is Windows 8 the solution? Possibly--the Windows Phone user experience is superior to that of Android, and both Windows Phone and Windows 8 uses Microsoft's Metro design language  However, Windows 8 is the "floor wax/dessert topping" of operating systems. It's designed to be used for both touch-oriented tablets and keyboard-oriented personal computers, and as a result, it has compromises that iOS and Android don't have. The "tablet" portion of Windows 8 looks like its usability will be competitive with iOS, but there are likely to be very few apps available for it at launch, compared to more than 600,000 for iOS. The "personal computer" portion of Windows 8 looks and works almost identically to Windows 7, which means that it has nothing to do with the tablet apps.

One the one hand, computer companies can't afford to concede the tablet market to Apple. On the other, it's clear that Android, at least the stock version offered by Google, isn't competitive with iOS. Windows 8 is likely to be better, but as a tablet operating system, it's starting where Android was more than a year ago. So what should tablet vendors do? The safest approach is to wait and see: Develop prototypes of Android 5 and Windows 8 tablets that can be taken into production quickly, but let competitors test the waters first. Don't commit the resources to production or distribution until one of the operating systems proves that can compete with iOS. Another option is to fork and skin Android in order to improve its user interface--riskier, but possibly  the only way to make Android a viable alternative to iOS.

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