Why Apple Will Not Be Part Of The Real Tablet Revolution
from the but-still-hugely-profitable dept
You don't have to be a marketing genius or industry pundit to foresee that tablets will be an extremely hot sector in 2012. The launch of Apple's iPad in 2010 largely defined the category, just as the launch of the iPhone defined a new kind of smartphone in 2007; in 2012 we will probably begin to see Android tablets start to gain major market share just as Android smartphones have done this year.
Currently, the tablet is something of a cross between the hipster tech toy of choice and a trivially easy-to-use computing device for couch potatoes. But those early sectors are incidental to the tablet's real potential to revolutionize education, particularly in emerging economies.
The devices are perfect: they are compact, connect to the Net wirelessly, run off battery power for hours and can be used by children and adults alike with little or no training. There's just one problem, of course: the typical tablet's high-end pricing – hundreds of dollars – places it so far out of reach for most of the world's population that it might as well not exist for them. That is what makes India's Aakash tablet - basic cost around $50, but only $37 for Indian students thanks to a government subsidy – so remarkable, and so important.
Of course its specifications are somewhat limited compared to the iPad – 256M RAM, 2 GB Flash memory, 7" 800x480 pixel resistive touch screen – but that's not really the point. The key issue is whether it is good enough for the educational purposes governments around the world have in mind. For although the Aakash began as a project purely for India, it has been swiftly taken up by a number of other countries, as this fascinating feature about the creation of Aakash by the Canadian wireless device maker Datawind explains:
[Datawind's CEO] Suneet was invited to meet with Thailand’s Minister for Information Communications Technology (who was so interested in purchasing 10 million tablets that he attended their meeting even as flood waters descended on Bangkok). Calls arrived from Turkey (which wants 15 million tablets), Sri Lanka, Trinidad and Tobago, Panama and Egypt.
This gives an indication of the potential of the Aakash low-cost tablet: to provide portable computing devices and with them access to digital knowledge on a truly global scale. The feature also explains how exactly Datawind managed to produce a tablet for a tenth of the cost of an iPad:
Part of the difficulty in engineering such a device is that the underlying goal—that its final price should be within the means of those who can’t afford high-priced tablets—dictates crucial engineering and component decisions. A piece of high-impact-resistant glass, such as the touchscreen face of an iPad, can cost upward of $20. Datawind’s touchscreen glass, which the company had engineered down the street, costs less than $2, though it won’t allow for luxuries like pinch-and-zoom finger swiping. There were also compromises on processing power: Datawind’s 366 megahertz processor costs less than $5, a fraction of the $15-plus price tag on the chips that power iPads and other comparable tablets. And while the decision to run Google’s free Android mobile operating system on the gadget saves money, it requires coders to dig deep into the Linux kernel that underpins the software, tweaking it until it runs smoothly on Datawind’s weaker processor.
As that makes clear, one key ingredient in the design of the Aakash was Android – and hence free software. This meant that Datawind's software engineers were able to build on several years' work by Google – and two decades of coding by the Linux community – rather than starting from scratch.
It's a reminder that even if – as seems likely – Apple's iPad retains its highly-profitable hold on the upper end of the market, it will never be able to offer a model that is competitive with minimalist tablets built around free software at the bottom. And since it is precisely those ultra-cheap models that will be sold in their hundreds of millions, perhaps even billions one day, that means that the real tablet revolution – the one that will transform education in emerging economies and with it, their societies - will not be one in which Apple plays a major part, despite its early leadership here.
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Filed Under: cheap, poor, revolution, tablets
Companies: aakash, apple
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Open Software, Open Hardware
Further, if you ask Intel to supply x86 chips, it will ask what you want to do with them, and quote a price accordingly. This is to prevent you from using cheaper chips in devices that might cannibalize sales from more expensive ones. Whereas the suppliers of ARM chips can pull no such stunt, since they know you can always go to another supplier.
Another interesting development is the Ainol tablet. This uses a MIPS chip, which the Chinese are quite fond of, instead of ARM. x86 chips ship about 350 million per year, while MIPS ships about 500 million, and ARM close to 3 times that. Which shows you how well back in the pack Intel is on volume.
Sure, Intel makes far more profit than all the MIPS and ARM suppliers put together. But that just shows how precarious its position is: it can only lose sales to the higher-volume, lower-margin competitors, it cannot push into their markets without sacrificing its own fat profit margins.
Not too dissimilar to the dilemma Apple faces from these low-priced competitors...
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Re: Open Software, Open Hardware
http://www.softwarefreedom.org/blog/2012/jan/12/microsoft-confirms-UEFI-fears-locks-down- ARM/
Open = good
Lockdown = bad
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Re: Open Software, Open Hardware
ARM devices that ship with Android have also been locked down, but that hasn’t prevented their users from hacking them into running custom Android builds, or even other varieties of Linux. To the point where some vendors have noticed that it is actually a selling point to ship unlocked, or at least easily-unlockable, devices.
So as usual, Microsoft is fighting yesterday’s battle, while the world moves on.
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Unless it has rounded corners (or somesuch IP nonsense)
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Re: Unless it has rounded corners (or somesuch IP nonsense)
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Re: Re: Unless it has rounded corners (or somesuch IP nonsense)
/sarc
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Re: Re: Re: Unless it has rounded corners (or somesuch IP nonsense)
Then the great thinkers at the revolutionary fruit company made the most epic breakthrough! They applied the apple curve(tm) to the corners of the tablet!!!!! Thanks to their truly unique brilliance, using a tablet is now safe.
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Re: Re: Re: Re: Unless it has rounded corners (or somesuch IP nonsense)
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Re: Unless it has rounded corners (or somesuch IP nonsense)
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I'm a tablet sceptic, but at that price i think i'd actually pick one up even if it's just for the livingroom table to do imdb lookups in front of the tv or whatevs.
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This, again? No the problem is that hardly anyone else out there can beat Apple's prices with a comparable product.
How much is an unlocked tier one Android smartphone vs an unlocked iPhone? How much is the subsidized price? Why is it that all of the manufacturers who are making "ultrabooks" are in the same price range -- if not more expensive -- than the Air?
Why is it that anyone that wants to undercut Apple's over-priced iPad is forced to use smaller screens, smaller batteries, and cheaper components?
Sorry. Build to the same quality level as Apple, and your retail price will be just as high... if not higher.
"...buy something cheaper that does what you want. when it needs upgrading..."
False economy. Apple devices have much, much higher resale values than do ones from Dell, HP, HTC, or anyone else.
It's rare if I can't sell my old Apple whatsit for 50% of what I paid for it, and then put that money down on a new one. In fact, I sold my iPad 1 and my last two iPhones for the same price I paid for them, making each upgrade... let's see, subtract, carry the one... right.
Making each upgrade FREE.
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Re: Re:
For ultrabooks/Air this is a false comparison at best. We are talking about a market, after all, that is explicitly about consumers who value the aesthetics and portability of their device over the performance. There are non-ultrabooks with similar hardware specs that don't have slick external designs and aren't as easy to carry around that are considerably cheaper. This is what is meant when it is said that the Air is overpriced, it's the same thing that is meant when it is said that ultrabooks are overpriced. Apples to Apples (pun intended) ultrabooks offer similar specs, portability, and design asthetics and Apple still sells their Air at a fair margin higher. The ASUS UX31E for example sells for a few hundred dollars less than the base model of the Air 13 and offers similar or slightly better performance and the Acer S3-951-6432 at ~$1200 compares favorably to a similarly speced Air 13 at ~$1600. These are not insignificant differences and there is no 'build quality' reason why apple would command this kind of price difference in these examples.
For phones I would generally agree that Apple is not overpriced. The top tier of phones this generation all sport similar hardware (although often using it in very different ways). The 4s certainly isn't overpriced compared to contemporaries from Samsung, HTC, or LG for example.
If you managed to get the same price you paid for an iPad 1 and an iPhone you either didn't pay full retail or you ripped someone off, possibly both. If I had to guess the most likely scenario is that you bought them used and sold them not too long after relative to the average replacement cycle i.e. significantly less than 2 years. That's hardly indicative of their resale values in general. A 2 year old iPhone 3Gs with average wear and tear looses well over 50% of its value in that 2 year period, for example, and that's the normal amount of time someone is going to have the device. Furthermore this resale percentage isn't significantly different from non iOS devices over the same period.
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You ignore the Air/Ultrabook comparison, insisting that it's "false", though everyone from Dell to Samsung are dropping the netbooks everyone stopped buying in order to jump on the Air bandwagon. (And went to Intel trying to get processor price drops so they could "compete".)
And the UX31E retails at $1099 vs $1299, a difference of about 15%. Build quality? Everyone to a T complains about the keyboard and trackpad. The Acer's build quality? Let's just say that I think you need to read a few reviews about that one.
And just a hint: Ultrabooks are not "overpriced" to those who do in fact value aesthetics and portability. (I have a MBP, not an Air.) Some people value fine tools. Others don't mind if they're toting cheap plastic bricks, as long as they work. To each their own.
Phones? You agreed. iPad? You ignored.
As to reselling, nope, everything was new when I bought them. And in fact I probably could have sold the iPad for more than I paid for it, but I decided not to rip people off. Being smart about what you buy also means being smart about when to buy, and when to sell.
And just to pick apart your 3GS example, they're selling on Amazon, used, for about $200 in good condition. If you bought one subsidized through your carrier, as most people do, you probably paid $199-$299. $199-$200=??? 'Nuff said.
Still, I think this puts the lie to first comment. In some cases Apple may still be the premium product, but they're far from being "vastly" overpriced, and the more you move from the computer space to the consumer space, the more competitive they get.
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HP Omni vs. iMac 21":
There's no difference in i5 that I can see. The graphics in the Mac are better. IEEE 1394, thunderbolt, and optical audio IO are all niche offerings that the average user is never going to use and even a power user is probably not going to use all of. I think you're significantly underestimating the cost of a blu-ray player and a license to playback blu-ray movies (it's well over $100 just for the player). Last but not least this particular model of HP is on sale with a free upgrade to 6GB ram. Right now it's only $739.99 base. The iMac is obviously still $1199 base. Will the competition always be on sale? Probably not but I think this is as effective an illustration as any that there are more frequent sales on PCs and they can carry steeper discounts.
I didn't ignore the Air/Ultrabook comparison and you address the examples I used to address that comparison so I don't know why you'd open with that. With apple still in the mid teens on marketshare I wouldn't say 'everyone stopped buying in order to jump on the Air bandwagon' either. I also never said there were no build quality differences between the ASUS, the Acer, and the Mac just that build quality alone doesn't account for the price differences in either case.
You ripped off anyone you sold a used product too at the retail price (unless you didn't pay full retail that is). Period. These devices did not appreciate in value while you owned them. You can sugar coat that by calling it 'being smart about when to sell' if it makes you feel better.
Just to pick apart you Amazon example they actually list at $148 and up (used - very good condition) and $189 and up (unlocked - used - very good condition) so 'about $200' is a fudge of 33% in the first case. Furthermore they're a lot more than $199-299 subsidized through a carrier, that's just what you pay up front. The unsubsidized ones are actually cheaper. SO the Apples to Apples comparison in this case is the unsubsized price for an unlocked 3Gs with the used price of an unlocked 3Gs. It's far more than 50% less if you had the phone and used it for any significant length of time.
Apple uses their niche as a boutique software developer primarily focused on slick UI building (and there UIs could rightly be called works of art in many cases) to leverage higher prices on hardware. If you like their operating systems this is possibly worth it for you. If you like their operating systems and hardware aesthetics it's almost certainly worth it to you. For those that are indifferent to both they're overpriced. As with everything were the bast majority of the price differences are locked up in intangibles like 'aesthetics' it's all in the eye of the beholder. I would remind you again though that when most people say they're overpriced they're talking spec for spec since that's what those people tend to care about. I don't know anyone who would say Apple is overpriced once you get beyond spec for spec comparisons.
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Spec for spec? Intangible? Apple offers DisplayPort and FW and Thunderbolt. Apple uses precision milled CNC computer bodies when most everyone else uses metal frames covered in plastic. Apple uses custom motherboards when nearly everyone else uses the cheapest possible reference design.
Apple uses custom ASICs and controllers and higher quality caps and other parts. Apple was the among the first to standardize on IPS-based screens. Apple uses better fans and better thermal design (Steve was a bit of a nut on this) so that their computers run quietly, if not silently.
Apple was one of the first to use custom-formed and sized LiPo batteries and custom controllers to maximize battery life and increase the number of recharge cycles.
Then there's MagSafe, custom power supplies, illuminated keyboards, magnetic latches, ambient light level sensors, HD cams, and more.
All of those things add up, and all of those things are why Apple notebooks are consistently rated at the top of their class, are consistently rated as the most reliable, and are consistently at the top of practically every consumer satisfaction survey.
Spec for spec? All because two different computers use the same Intel chip?That's a laugh.
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And then there's the non-so-minor issue about using a machine that's not plastered with cheap Intel-Inside, Nvidia-Inside, and Windows-Inside stickers.
You can go down the list and simply say: Keyboard? Check. Trackpad? Check?
But the difference in HOW they're made is the difference between a machine that works and is a joy to use, and a computer that's little more than an exercise in frustration.
And that's a "spec" usually not listed on the chart...
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You might add in the required annual Anti-Virus subscription too...
(Sorry for the subsequent posts. Using this as the basis for an article.)
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At the time, other people were selling $600 used iPads for $800 and $1,000 and more. I also take very good care of my toys. The iPad was immaculate. I decided to offer it for the $600 I paid for it and drop the price if need be after a day. Wasn't listed for more than an hour. The buyer was ecstatic, and gave me a great review.
With a happy buyer and seller, who was "ripped off" again?
"Just to pick apart you[r] [sic] Amazon example... Furthermore they're a lot more than $199-299 subsidized through a carrier, that's just what you pay up front."
You buy a cell phone subsidized, you pay a contract. You buy it unsubsidized, you pay the same rates. So my "up front" cash paid, over and above the contract, was $299. Sold for $200, again, immaculate, after one year. (That one was to Gazelle.)
Regardless, I've sold enough Apple gear, and Dell gear, and HP gear, to know that the Apple gear has consistently higher resale value. (Actually, there have been a few Dells and HPs I had to give away. No buyers.)
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And so history repeats itself
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Re: And so history repeats itself
-CF
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If you mean current monetary value in terms of market capitalisation and cash in the bank, then yes.
If you mean valuable to humanity, then it would be a resounding no. Trying to lock up broad concepts and producing closed and limited platforms is not beneficial to our progress.
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Re: Re: Re: Re: And so history repeats itself
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While openness may be a helper, it won't down the line if every 50$ tablet gets exploited out of the box. No need to remind anyone that 25% of the Android exploits were found in the android store...
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Response to: Anonymous Coward on Jan 13th, 2012 @ 4:27am
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Citation, please.
In terms of being "secured", the iOS App Store and the Android Market are pretty similar. I am not aware of any significant hacks of the stores themselves.
The iOS App Store is curated, meaning that all submissions are reviewed and must pass Apple standards before being listed. The Android Market is not curated, preferring to take an "innocent until proven guilty" approach.
None of this especially matters in this case, as the tablet in question most likely does not qualify to have the Android Market, as I'm guessing that it does not pass the compatibility requirements. This is not saying that it is intrinsically a bad tablet, just that not all Android devices qualify for the Market.
Moreover, part of Android's freedom is that others can create their own markets, as Amazon did. So, the fine folk creating and sponsoring this tablet could easily set up their own market, with whatever rules they choose. You cannot do that with iOS, outside of jailbreaking.
And your evidence that they will be "exploited out of the box" is... what, exactly?
Citation, please.
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That goes back to Mr. Murphy's point of "The Android Market is not curated, preferring to take an 'innocent until proven guilty' approach."
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Many exploits are only a problem to those who have foolish business models.
One man's "exploit" is another man's cool idea.
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1) Defending the user (physical possessor) of the device against malware.
2) Defending the business interests of the supplier AGAINST the user.
Open source software has historically been FAR more secure with respect to issue 1 - and there is no reason to expect that to change.
Open source software CANNOT provide any real security with respect to issue 2 - but then - no one in his right mind cares a fig about issue 2.
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What you did was to conflate "two" with "to."
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'Nuf said. Puts in with the vast majority of people who are only going to use that which has been provided to them.
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http://www.computerworld.com/s/article/9221615/Researcher_plants_rogue_app_in_Apple_s_App _Store
It gets better in the second page.
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Re:
http://www.computerworld.com/s/article/9221615/Researcher_plants_rogue_app_in_Apple_s_App _Store
It gets better in the second page.
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Full Circle
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Re: Full Circle
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Wait until Windows 8 when, if we believe MS, they will unify their OS across devices. Now you will have a phone that really is a full computer. Dock it with a tablet and dock the tablet with a keyboard and you have a computer that is a phone with you everywhere you go.
This is where Motorola missed the boat. People don't want to turn their tablets into laptops, they want to turn their phones into tablets and then the tablet into a laptop. How powerful will that be? By the way, I am patenting that idea since you can apparently patent ideas these days.
This is why I think Windows 8, if MS can pull it off, may dominate the phone and tablet world like they do the desktop/laptop world. You will have a phone/tablet/laptop that can run apps, browser and MS Office applications. One device to rule them all.
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Re: Re: Full Circle
How can a device be "a precursor of smaller devices" when it is smaller than the device it is precursor to?
At best it could be regarded as a precursor to larger devices (which are nonetheless smaller than some other devices that were already around).
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Was that an advertisement?
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Don't forget the security impact of DRM
Relevance here? Operating systems that include DRM cannot be secured, period, full stop. Operating systems that do not include DRM at least have a fighting chance -- although of course, we can debate just how large or small that chance is.
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So What
I don't think Apple will mind - they (and Microsoft) will just sue all the Android device makers and programmers to make up the difference.
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Apple can't compete?
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Re: Apple can't compete?
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Re: Apple can't compete?
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Taking a bite out of the apple
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At over 100.00 US ?
That's a LOW price point ?
Maybe for the 1% :P
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I can tell you that my family's income is in that ballpark, and $100 for a toy is too much. I see that $100 as:
7% of my rent
my electric bill
2 month's internet
25% of my grocery budget
I could go on, but the point is for a lot of us $100 is a big f***ing deal.
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The *Real* Tablet Revolution
I also take issue with "[Apple] will never be able to offer a model that is competitive with minimalist tablets built around free software at the bottom [...]" I think if anyone could Apple *could* compete at the bottom, efficiencies of supply chain etc., but they've shown time and time again that they don't *want* to compete at the bottom. I think the opposite is true; most manufacturers would love to compete at the *top* but cannot do so.
Which brings me to another question; why are we making a comparison with Apple? It seems more appropriate to make a comparison with Motorla, Barnes and Nobles, Samsung or Amazon. Do we consider them to be competing at the lower end (note: not the bottom)? None of these manufacturers (yes Apple included) can compete at the sub $100 level.
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Re: The *Real* Tablet Revolution
The question is more "is Apple interested in the market Datawind is? My answer is that I doubt it. Still, major movers and shakers in the computer market made OLPC's rather short life miserable.
Invariably there will be nits to be picked about where Datawind has cut back to make these things affordable in some of the poorest parts of the world but at least they're trying to do something there. Android is a sufficiently proven OS to make it more than viable for this use and because it's open source, it makes it easier to customers and countries to modify the code for their own use and purposes. In that final sense it makes it more valuable to places like India and Bangladesh. India, at least, is overflowing with coders now who can tackle problems quickly and efficiently.
So Kudos to Datawind for what they've come up with. The comparison is inevitable as it paved to way to make what Datewind is hoping to bring to market acceptable in markets Apple's not the slightest bit interested in but due to the iPad there is an interest in tablets.
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Re: Re: The *Real* Tablet Revolution
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Yea, and BMW won't be part of "car revolution"
And look - BMW have "closed" design! You can't just buy no-name made-in-somewhere-in-china engine and put it there. Obviously they will go broke any moment soon. Sounds familiar?
So, cut this anti-Apple bullshit. They chose to target high-end market segments, in phones, computers and tablets. It doesn't make iPhone or MacBook less "real" or "not part of ...".
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Revolution vs. Evolution
Mike has talked repeatedly about how people build on other people's success in order to build something new. I will be the first to tell you that in it's individual pieces the iPad is not revolutionary. What it did do, however, was bring those pieces together in a revolutionary format. Since the iPad came out people have been trying to replicate that success. They should be trying to come up with their own formula based on what Apple has done, but, sadly, many companies would like to replicate instead of innovate.
While the Aakash tablet appears to be a "good deal" for those that cannot afford an iPad, it is hardly revolutionary. Lower quality screen, lower speed processor, less RAM, etc., all seem to indicate that it is an iPad imitator, not a revolutionary. I am not saying that being an iPad imitator is bad, as they obviously have a specific target demographic in mind and they are very successful within that demographic. What I am saying is that they are not the table revolution. That has already come. They may be the start of the revolution in Education, but not the Tablet.
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language
The iPad, and Apple in general, have an abysmal record of supporting different languages on their software. And it's very difficult to contribute a localisation even if you want to.
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