Technology previews vs. premature release

Earlier today, Nintendo previewed its new Wii U at the E3 conference. The Wii U is a new console with a tablet-like device that serves as a controller and second display device. Like a number of other Nintendo events, today's Wii U announcement was deliberately positioned as a technology preview rather than a formal product announcement. The Wii U won't ship until 2012, and it may be significantly different by the time it ships. However, Nintendo is encouraging developers to start writing games and applications for the Wii U, so that when it ships, there will be a significant third-party library to support it.

I'm not a fan of early announcements, but when it comes to new platforms, technology previews make a lot of sense. They introduce developers, the press and potential customers to new product concepts, and they build interest and support for the formal product release. They buy time for their vendors--Nintendo said "2012", which gives them almost 18 months. They're clearly prototypes, and they give vendors the time they need to gather feedback and make changes before they go to market.

Compare this approach with what Google did with Google TV and its Android 3.0 tablets. Last year's Google TV announcement was clearly premature; the resulting products from Sony and Logitech were too expensive and too hard to use for most consumers. There was no reason for Google and its partners to rush Google TV out for last year's holiday season. Had they positioned the announcement at last year's I/O Conference as a technology preview, with a product release scheduled for some time in 2011, they would have had the opportunity to get developers involved, get much more usability feedback and resolve objections from television and cable networks before they went to market.

Much the same thing happened earlier this year with Android 3.0 and Motorola's Xoom. Google and Motorola were determined to beat Apple's iPad 2 to market, so they rushed out both Honeycomb (Android 3.0) and the Xoom. Third-party developers had almost no time to develop tablet-aware Android apps before the Xoom shipped, and the first version of the Xoom was much too expensive: $799 (U.S.) without a data plan, or $599 with a two-year contract. In addition, Motorola promoted the Xoom's LTE broadband compatibility, but the initial model shipped with 3G CDMA, and Motorola still hasn't released the LTE capability.

Honeycomb was rough around the edges, with almost no tablet-specific apps, and the Xoom was too expensive. It was a replay of the Google TV launch. Even though there are many more Android tablets coming this year, it looks like there won't be a big market for them until 2012 at the earliest.

If Google had given a technology preview of Google TV last year for release in 2011, and if they had previewed Honeycomb with "reference platform" tablets early this year for release in time for the holiday season, it would have given developers time to build a base of compatible apps, and hardware vendors time to build devices that took full advantage of the operating system while meeting customers' price expectations. In hindsight, it wouldn't have hurt Google and Motorola at all to ship after the iPad 2; in fact, they would have shipped better products at lower prices.

The lesson is that if you're working on platforms, not just products and services that are compatible with existing platforms, technology previews are a much better option than prematurely releasing final products.

What's going on with Android 3.0 tablet pricing?

The annual Mobile World Congress opened this morning in Barcelona, and as expected, there were many smartphone and tablet introductions. One of the most important was LG's Optimus Pad, which will be sold in the U.S. by T-Mobile as the G-Slate. The Optimus Pad runs Android 3.0, has a dual-core processor and an 8.9" display--fairly standard so far as Android Honeycomb-based tablets go. The big shocker, however, was the price: According to Engadget, the Optimus Pad will be priced at 999 Euros, or the equivalent of $1,395 in the U.S. Even after you subtract the 19% VAT, its equivalent U.S. price is $1,075. That's almost $250 more than the most expensive iPad.

Motorola's Xoom Android 3.0 tablet, which has a 10.1" screen but otherwise is almost identical to the Optimus Pad, will be priced at $799 (U.S.) when Best Buy makes it available for pre-sale later this week. That's $30 less than Apple's price for its top-of-the-line iPad. However, Verizon is rumored to be requiring Xoom buyers to purchase at least one month of broadband data service in order to enable the tablet's WiFi interface. The least expensive data plan is $20/month, so that makes the price difference between the Xoom and the iPad only $10.

Last fall, the expectation was that WiFi Android tablets would sell for between $300 and $400, and their lower prices would give them an advantage over the iPad. Now, however, two of the three major Android 3.0 tablets announced so far are priced as high or higher than the most expensive iPad. (The third tablet, Samsung's Galaxy Tab 10.1, hasn't yet been priced.)

The iPad 2 is widely expected to be released in the next couple of months, and the big differences are likely to be dual cameras and a faster processor--the key features that differentiate the new Honeycomb tablets from the current iPad. The iPad 2 is almost certainly going to be priced no higher than the current model, so where is the market opportunity for Android 3.0 tablets?

We may eventually see Android 3.0 tablets from second- and third-tier manufacturers that are priced in the $300-$400 range, but Android tablets need to compete with the iPad now, not at some unspecified time in the future. The pricing policies of the first-tier manufacturers may end up giving the tablet market to Apple--or they may open the door for RIM's PlayBook (which the company's CEO said today would sell in a basic WiFi-only configuration for under $500) or HP's TouchPad, if HP prices it aggressively.