Why operators will find it hard to sell tablets
[Via asymco]
On the eve of iPad 2.0, it’s time to think again about this curious new computer. My intuition tells me that this product category will behave very differently from the iPhone and will not be subject to the same sales ramp.
The iPad has been on the market for less than a year but it’s still a puzzle for many. It’s a product that’s often seen as an iPhone product line extension. From a hardware point of view, it certainly seems to be. It has an almost identical internal architecture and uses almost the same software. An engineer would look at it and reasonably say it’s the same thing.
However, from the way it’s used and the way it’s sold, it has very little in common with its smaller cousin. There are plenty of experts who can detail how the products are used differently, but I would highlight the portability of the iPhone makes it suitable for a completely different set of tasks than the less portable but more immersive iPad.
But what I want to dwell on here is how differently the products are sold.
I’ll build the case from evidence that Apple provides. The most important observation is that the iPad is an unlocked product. Although you can hire an operator to provide you with data services for it, the product is designed not to rely on that. As a result the product is effectively “divorced” from the operator channel. This means it does not typically benefit (or suffer) from subsidy.
[More]
All the other tablet manufacturers seem to require a telecom channel to sell them. They do not have the same penetration ability that the iPad has.
One can only be found in carrier stores. The other can be sold anywhere. One is retailed similarly to a computer. One is marketed just like a big phone.
Since the tablet, and particularly the iPad, really is a lightweight small computer, which sales strategy works with the marketing strategy?
Not only can Apple command a large portion of the market for the hardware needed, they also command the delivery channels to sell all of these. Many tablet makers are much more constrained in both their hardware and points of sale.
I have a Wifi iPad because I can get data without Wifi through my iPhone. Why pay for both? I have not yet entered a situation where I could get data on my iPhone but could not get this vital data immediately over to my iPad.
And with the ability to tether, I should have nothing to worry about.
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