Google’s tablet has the potential to split the tablet market in two

June 28, 2012

Google's tablet gives Android vendors much to ponder

With Google’s Nexus 7 tablet having debuted at the firm’s I/O developer conference this week, it’s interesting to think what impact the 7-inch Jelly Bean tablet could have on the market, and certainly on those second-tier Android tablet vendors.

In fact, I think Google could end pushing these vendors into a ‘stick or twist’ decision; i.e. keeping with what they're already doing, or taking a brand new approach to counter the threat of competition.

On paper at least, the Nexus tablet looks like it has the tools to shake-up a low-cost Android tablet market which hasn’t been much change since the tablet’s second coming in 2010.

With the Nexus 7 tablet sporting a 7-inch screen, the next version of Android (Android 4.1 Jelly Bean), and a powerful quad-core Tegra3 chipset from Nvidia, the tablet looks to be a good value considering it starts from $199 and goes up to only $249.

Indeed, providing these specs are backed up by good usability, there's actually the potential for Google to bring about a split in the tablet market; low-cost and premium.

That split would unlikely hurt Apple, and might actually help the Cupertino giant hand (more on that later), but it could be big news to the likes of Acer, Asus, HTC, Toshiba and even Samsung on how they market their future tablets.

How so? Let me explain.

Put simply, these guys are currently touting tablets for $300 or more, and while there’s nothing wrong with that, that price becomes increasingly hard to justify when similar specced tablets from Google and Amazon are heading out the door at $100 cheaper. The fact that you could just pick up an iPad for just $100 more doesn’t exactly help their cause either.

With that being said, I think that you’ll start to see vendors ‘choosing sides’ (budget or premium), and I don’t think it should be lost on anyone that the likes of Acer and Samsung have launched or plan to launch tablets under the $250 threshold.

This splitting of the market will make things clearer for consumers, but it’s not going to be easy for vendors, especially as they have their brand image and market positioning to consider. Asus and HTC, for instance, have at various points tended to market their smartphones as high-end goods, which might have a limiting factor on what they can do with future tablet releases.

But much depends on Google getting it right

That said this space isn’t a slam dunk for Google, or Amazon for that matter. The Kindle Fire has received mixed reviews since launch in November, and there’s always the danger that a poor tablet doesn’t just put consumers off a brand or operating system, but the form factor as a whole.

One analyst told me this week that poorly made $250 tablets are more likely to work out in favor of Apple and the iPad, if only because the poor quality merely reinforces how good the iPad is.

Another, ABI Research’s Jeff Orr, went further by suggesting that price is actually not even the barrier to tablet adoption.

“A $199 price point for a tablet is still early for the market", said Orr. "The total available market (those willing and able to buy now) has yet to move beyond early adopters, and when ABI Research surveys consumers in different countries, the leading hesitation is justifying an additional device.”

If that view holds true, then this makes it even more important that Google’s Nexus 7 can overcome the problems experienced with the Kindle Fire by offering an excellent user interface and build quality. But if Google doesn’t fulfil these needs, then consumers won’t just be turned off Google, but will also have second thoughts about buying a tablet altogether.


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