RicDay on Publishing

Have you noticed how many people are using tablet computers? I’m seeing them all over the place — in parks, on public transit, in coffee shops — pretty much anywhere people might in the past have been seen reading newspapers. I also see a lot of ebook readers out there: mostly Kindles, but also some from Sony and Kobo.

What really stands out for me is, I am seeing very few tablets that are not iPads. This month I have seen just one Samsung Galaxy “in the wild” and no other Android tablets. I have yet to see a Viewsonic ViewPad or other Windows 7 device out there.

Where is RIM's tablet? Instead of putting it in the hands of the public, they keep “adjusting” the specification they announced last year. The more recently announced HP TouchPad also seems a long way from being something you or I could actually purchase. Note to HP: could no one on Hanover Street come up with a better product name than a concatenation of Apple’s two iconic names?

At this rate, Apple will launch the iPad2 and maybe the iPad3 before RIM, HP, and perhaps others come to market.

The problem everyone else has is, they approached 2010 with the expectation that Apple would launch a tablet and that it would retail around the $1,000 mark. When Apple announed the basic Wi-Fi-only model would retail at $499 and a basic WiFi+3G model would cost $629, I am absolutely certain that nuked the business assumptions all other prospective tablet makers had been using.

Apple placed a pretty big bet on the iPad before launch. I think the bet was on how many Apple believed they could sell, and I think Apple made commitments to parts vendors based on the bet. Committing to high volumes and putting your money behind those commitments gets your components vendors to really sharpen their pencils when quoting.

Price, price, price

The problem now facing everyone else who wants to be in the tablet space: how do you come up with a product that is comparable with the iPad and can list in the vicinity of the iPad retail price? I don't think RIM, HP, or Motorola (the coming-to-retail-sometime Xoom) can compete. I think everyone is waiting to see what Apple does with the iPad2.

It is not even about features right now. Yes, Xoom and the others may have cameras, USB ports, or other items not built into the iPad. One or two of the most-wanted features will perhaps be incorporated in the iPad2. But I think what scares the competitors is this: if Apple releases a range of "2" models analogous to the "1" models (WiFi, WiFi+3G, different memory capacities) and sets the new model prices at the current "1" model points, and retains the 16GB iPad1 at a new price point of $399, where do the newcomers fit?

Apple’s first mover advantage is huge right now. The company has a one-year-plus jump on potential competitors and around 15-million users who are mostly happy. RIM, HP, and Motorola, to say nothing of the second and third tier makers out there, have a steep mountain to climb.

Sure, there is lots of space for more tablets from more suppliers, but unless Apple does something really stupid, the high ground and the big margins are Apple’s.