Come and meet these leaders of the Tablets 2.0 revolution:

  • Jane Boulware

    Vice President, Windows Devices
    Microsoft

  • Hector Llorens

    Platform Manager, Business Tablets
    Intel

  • Christopher Gish

    Vice President of Sales
    Sunovion Pharmaceuticals

  • Steven Beggs

    Senior Manager, Learning Innovation
    Home Depot

  • David Goodman

    CIO
    International Rescue Committee

  • David Crain

    Assistant Provost & CIO
    Southern Illinois University (SIU)

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This Week in Tablets: Will Android and the iPad Mini dominate the race to the middle?

by George Jones

January 26 2013

George is a founding editor of TabTimes and currently works for Wikia.com as Director of Programming


Also Inside: The good, the bad, and the ugly of Microsoft’s Q4 2012 earnings

One of the very best things about the age we live in is the near-instant access to pretty much every song ever released in the last 50 years. What a remarkable achievement by humanity.

This afternoon, while I was working and listening to Spotify Radio, Van Halen’s Panama came across my queue of songs. (Strangely enough, it came across on a Fela Kuti station, which I’m still trying to make sense of.)

I loved Van Halen. I was in 8th grade when 1984 came out. It blew my mind, and pissed my parents off. I grew up in a mostly black and Hispanic neighborhood in Inglewood, California, but our neighbor was a rocker. He introduced me to 1984 and I was like, holy crap. It was and still is—I can confirm this after spending the afternoon and evening moving through a bunch of their albums—awesome.

I think this became the period when my parents started to officially wonder if they should worry about me. My mom's take on Van Halen was decidedly unenthusiastic. Beyond Van Halen, I was diving into computers big-time in 1984. I spent hours sitting at my Commodore 64 listening to Van Halen on cassette, playing games, checking out Bulletin Board Systems, and downloading whatever I could get my hands on.

No surprise: Listening to 1984 took me right back to the feeling that I was a square peg. By the time Top Jimmy came on, I could pretty much smell floppy disks and that weird burning smell from my Commodore 1541 drive. I even felt the subtle tug and guilt that I should be outside, or you know, talking to girls.

Between all this novelty and my parents’ raised eyebrows, I felt like I was living on the edge almost 30 years ago. At age 13, on the brink of high school, this was an extremely powerful notion.

Alt to mainstream in 10 years

What’s crazy is that, 2 years after the C-64's release, it had sold millions. And 5 years later in 1989, hobbyist computers like the Commodore 64, the Atari 400/800, and the Apple II were already well past family computers.

By 1994, we not only had a fully established mainstream system in the IBM PC and Windows, but we also had the very beginnings of the Internet.

It’s easy to get excited about how rapidly tablets (and smartphones) have moved into the mainstream, until you remember that Microsoft introduced tablet computers back in 2003, and that Blackberries have been around since 2006.

This said, it’s still incredible how quickly we’ve moved from the first iPad in 2010 to 100+ million tablets 3 years later.

I’ve said it before: We’re squarely in the mainstream now in terms of who’s buying tablets. And tablet makers are scrambling to make and release tablet devices that are capable of penetrating the middle of this market.

But what exactly does “middle” mean?

In terms of price point, it’s pretty clear that the mainstream middle means the $200 to $400 range. This mostly means Android…but it also means iPad Mini, which explains Apple’s aggressive push to place an 8-inch tablet into the market.

(The middle also means older generation iPads, which, in addition to the Mini appear to be eating into Apple’s profits, even while Apple is rapidly selling them.)

The middle of the market also appears to mean a 7-inch or 8-inch screen, which for most devices means standard HD resolutions vs. super HD. This will likely change this year as we see more and more large-format tablets in the 9- to 10-inch range, but for now, when I think of an affordable, mainstream tablet, I think Nexus 7, Kindle Fire HD, or iPad Mini.

The one thing tablet makers should be clear on is that “middle” almost certainly means “games”. Mainstream tablets need to be able to play the latest games because that’s what people do with their devices.

I’ll also argue that the middle no longer means skimping on storage memory. Given the large volume of pictures, games, and other data we’re toting around, it’s hard to imagine consumers being satisfied with 16GB of storage anymore.

The middle of the market also probably means BYOD, if only because the moment you buy a tablet, you start taking it everywhere with you.

The upside to tablet editions for publishers

An interesting blip that I missed last week explains one more reason why magazine publishers are excited about tablets: They may very well spell the end of rock-bottom bargain subscription rates.

At least they will if Hearst Publishing has anything to say about it. The publisher is charging an average digital subscription price of $19.99, while its print sub rates are only $10 per year now. Bonnier (Popular Science, Field & Stream) and Conde Nast are following suit.

Increasing sub rates isn’t just a great way to offset declining advertising revenue, it’s mandatory if magazine publishers want their titles to stick around.

This week’s loser: Microsoft

Microsoft didn’t have the greatest earnings report, but it could have been a lot worse, despite the media coverage (which used the word fail more than I would have.)

There are bad facts and good facts for Windows 8:

  • Overall revenue was up 24% year over year thanks to Windows 8 (and pre-orders which got lumped into Microsoft’s Q4 earnings.
  • In the same relative period back when Windows 7 came out in 2009, the release of this OS boosted Microsoft’s revenue by 70%.
  • Surface sales are private, but analysts are estimating numbers in the 750k – 1mm range. It is beginning to appear that Microsoft hurt itself by selling its tablet primarily online; while 750,000 tablets isn’t terrible, consumer’s exposure to the tablet wasn’t as great as it could have been.
  • A greater concern is Microsoft’s Office division, which is hurting. Revenue declined 10% in that group. Going back up to my initial point, my bet is that mainstream tablet adopters are not going to flock to Microsoft Office en masse. It’s not an absolute necessity.
  • Microsoft’s overall Q4 revenue was down 4% year over year. That’s not good either.

Overall, not a great picture for Microsoft. This said, it appears that the company has established a beachhead with Windows 8 and Surface. And Microsoft did announce a ship date for the Surface Pro tablet ship date. February 9 is now the big date.

This week’s winner: Apperian

Not only did the Boston-based maker of mobile app management software have a great 2012, but Intel’s investment arm recently invested an undisclosed sum of money into the company.

Beyond the financial win for Apperian (and Intel Capital, theoretically), this also feels like confirmation that mobile device management at the application level is a growing trend that could displace some of the players in the crowded MDM market.

It’s a perfect fit for the BYOD scene, that’s for sure. 

George is a founding editor of TabTimes and currently works for Wikia.com as Director of Programming

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