Saturday, March 5, 2011

Can anyone challenge the iPad 2?

Can anyone challenge the iPad 2?, article.
"You really appreciate Apple’s presentation style when you look at other vendor events. A few weeks ago, HP (and I could likely put any vendor name in here) had an event to launch its TouchPad. Before the event was even over, bloggers were wishing for sharks to eat the presenters. It was like the executives sucked any excitement out of the room."

Isn't it funny how a business executive with life and charisma is almost a contradiction in terms? It is just interesting how rare this is.


Stephen A said...

There isn't ever going to be a single obvious “iPad killer” in much the same way there has never been an “iPod killer”. Instead the iPad will face Android mediated “low-end disruption”:
The basic concept of low-end disruption is that a new competitor offering to the “low end” of the market a “good enough” product which gets progressively better undermining the existing dominant player, which as it improves its product tends to overshoot the needs of even high end users. The initial products are disappointing, but rapidly improve until at some point the market for the dominant product collapses. There is no specific “killer product” but rather a proliferation of products which offer more flexibility and different price points.

Of particular interest is the last two figures in the link. In the second to last figure, Apple gets the lions share of the profits in large part via rent extraction:
Rent Extraction
Note that this is increasingly true of software and content in the Apple world:



On the other hand low-end disruption pushes the profits downward to the component manufacturers. This makes the low-end disruption approach undesirable to corporations which farm out production and make money from design, integration and rent extraction. Thus many of the more visible players in the US will view this strategy as an anathema. On the other hand companies that make a lot of components and modules (ASUS, Lenovo, and most importantly Samsung) will love this. Android serves as a catalyst for this in that is provides a common interface and brand identity.

The Nook Color is a very good case in this regard, it represents an alliance between Barnes and Nobel (a content purveyor with US name recognition, threatened by Apple's rent extraction) and Inventec (a Taiwanese laptop maker unknown in the US) using Android in an end run around Apple’s rent extraction in hardware and content. Expect more alliances of this sort which combine a name brand content or software producer working with Taiwanese or South Korean hardware makers.

eolake said...

Thanks, Stephen, this is very interesting. And I can see how this thing is hard to fight. (Apple seems to be doing well with the iMac though.)