Last few weeks were really exciting for tablet enthusiasts.
Microsoft has shocked the world by announcing its Windows 8 tablet hardware
branded Surface. Windows OEMs now got the message: make great Windows products
or face direct competition. Surface specs are impressive. There are several
usability innovations to mention: smart ventilation to prevent overheating
(iPad owners know what I am talking about) and of course, keyboard/hard cover.
The later adds to the value proposition and can be clearly game changer in the
tablet space. Metro UI of the operating system is another substantial addition
to the value proposition. Such differentiations make Microsoft Surface target
segment more affluent, direct iPad competitor.
The only news worth mentioning about Nexus 7 is price of
$199, however there are comparable cheaper devices on the market today. Yes,
you can buy Android tablet for less than Android phone! The device is targeting
low end user and is in no direct competition with iPad, the dominant tablet
device. On the opposite, it competes with other Android makers.
By introducing another
low price device Google continued making the Android OEM ecosystem
unsustainable mid-term by putting pressure on hardware margins. Committing to
make Android devices is the road to no-profits-land, unless business model
includes vertial intergation bennefitting from the economies of scope: Samsung
makes own chipsets and screens, the most expensive device components; Amazon
sells tons of content through its loss leading Kindle devices; Google sells
advertising through its operating system. Very few Android OEMs are vertically
integrated and barely profitable.
Google has made the news
with Nexus 7 but the impact on its ecosystem is negative. Acquisition of
Motorola Mobility puts Google in direct competition with its OEMs. Android nominal
growth continues now activating 1 million devices per day. Market share growthhas stopped and there are four mid-term issues impeding it further.
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