Dec 272011

I’ll admit that I’m a little worried. Although I have no doubt that Android tablets will get better over time (all technology does), Android tablets risk being a niche product for one very simple reason: companies like Motorola, Asus, and Acer cannot seem to get out of the “because Apple can” mentality.

Apple charges what they do for their iPads because … well … they can. Not only are the die-hard fanboys willing to pay whatever Apple demands of them (and don’t you Apple types dare try to deny it), Apple has built up not a product line but rather an entire ecosystem. If you know how to use an iPod, you know how to use the iPhone and the iPad. That has a very profound effect on the buying potential of Joe Q. Public.

Android tablets, however, don’t have the same luxury. Not only do they not have consistent interfaces (especially on Samsung products because they include their bloatware called TouchWiz), they also don’t have the mindset, advertising, and arguably the ease of use of the iPad. The only tablets that would have a consistent interface are those with stock Android; but even then the interfaces are slightly changed between Gingerbread, Honeycomb, and the new Ice Cream Sandwich.

Apple has also developed that ecosystem so that you can give an iPad to your grandparents and they can be surfing the Internet, downloading books and apps, and even printing to a compatible printer in a matter of minutes. Android … not so much. Now you need to decide between the Android Market and Amazon’s App Store, if either of them are even available, but even they fight with each other. If I buy an app from the Android Market, Amazon’s app store detects it, thinks I bought it through them, and tries to update it with Amazon’s DRM! You can’t install the Amazon App Store on the Nook and therefore can’t take advantage of Amazon’s Free App of the Day, for example. With respect to printing, even HP’s TouchPad fails in that regard. Though it successfully detects my networked HP color laser printer, it fails to print and instead gives me a very generic error that is of no practical use. When it comes to simplicity and ease-of-use, Apple clearly wins and people are willing to pay for that.

Let’s not forget the mindset that Apple has. It seems like most people around the world mourned when Steve Jobs died because hundreds of millions of people love the products that he helped to design. The “I’m a Mac, I’m a PC” commercials were universally loved. When you walk into any Best Buy or similar store, all of the Apple products are together in their own area, often with large signs to catch your attention. Go to the Android tablet section and you’ll a dozen different tablets of different sizes and technical specifications, none of which tend to stand out.

Where are the Android commercials that are as well-loved as the “I’m a Mac, I’m a PC” commercials? Where are the eye-catching displays? There is nothing that the average Joe Q. Public knows about Android to make it stand apart from Apple, at least with respect to tablets. (Phones are arguably a different issue.)

As a result of Apple’s massive marketing campaigns and united ecosystem, Android tablet manufacturers have only one major tool to compete with Apple – price. Unfortunately, this is where Motorola, Asus, and Acer have been a massive failure. Instead of undercutting the iPad to make the average consumer take notice, each of these manufacturers decided to take the route of “Well, if Apple can charge that much, then so can we!” which has made them close to being a laughing stock in the tablet world.

Think about this. As it stands now, compare a $500 iPad vs. a $500 Moto Xoom or Asus Transformer. Joe Q. Public knows iPad and Apple. They know people who own an Apple product. They’ve probably heard a lot of people who recommend an iPad. When they walk into the store, they might look at all of the different Android tablets, but chances are they’re going to move to the Apple section with a justification that “If I’m going to spend that much money, I might as well buy an iPad.” But a $500 iPad versus a $300 Moto Xoom or Asus Transformer — that would make the decision to go to Apple a far more difficult one. This is what companies like Motorola, Asus, and Acer can’t seem to understand.

That said, Amazon and Barnes & Noble have definitely paid attention to the consumer with the introduction of the Kindle Fire and Nook Tablet. Neither are full Android tablets in that they have proprietary interfaces and neither are as large or as powerful as an iPad; however, the price points are at $199 and $249 respectively, which are price points that most people can afford. (Personally, I’d rather pay the extra $50 for the Nook Tablet’s external SD slot.) Both of these tablets have sold millions of units. A local B&N representative told me that during the week before Christmas they needed to open a new case of Nook Colors and Nook Tablets every half hour. Amazon had millions of pre-orders for the Kindle Fire a week after they announced it.

Similarly, HP’s servers were crushed when they offered their TouchPads during their fire sale a few months ago. A 10-inch tablet for $99 (16 GB) and $149 (32 GB) was unheard of. I managed to get two of them, but only after fighting with their overloaded servers for more than two hours, hitting F5 to reload the browser page over and over again. Their recent sale of refurbished units on eBay were similarly successful, having sold out their entire inventory in less than an hour. (And I must say that Cyanogen runs very smoothly on the TouchPad.)

As a final example, whenever refurbished Android tablets from Motorola, Asus, or Viewsonic appear on Woot or Daily Steals, they’re sold out within a matter of hours, especially if they’re priced below $300.

Between the TouchPad fire sale, the huge sales of the Kindle Fire, Nook Color, and Nook tablet, and the rapid sales whenever decent, refurbished tablets appear on Woot and Daily Steals, the evidence that people want good tablets at reasonable prices is obvious. The general public simply does not want to pay $500 for a tablet.

However, the other side of this coin is also obvious: Apple, Amazon, and B&N subsidize the cost of the hardware through app, book, and magazine purchases that are made through their tablets. Motorola, Asus, and Acer don’t have that luxury; however, if these companies want to make a serious dent in Apple tablet sales, they need to price their top-of-the-line tablets at least $150 or $200 cheaper than the iPad for Joe Q. Public to take notice.

Yes, that will almost certainly lead to taking a serious hit in the revenue stream because they would have to sell at a loss. But perhaps it would make up for that in the future by helping to build the brand loyalty that worked so well for Apple. Then again, perhaps it wouldn’t. I don’t have a crystal ball. But I’ve seen enough of the tablet market in the past year to know that the current Apple-price-matching model from Moto, Asus, and Acer means that their tablets will be restricted to geek and anti-Apple types while Amazon, B&N, and Apple laugh themselves to the bank and continue to lead in tablet market share.