Tablet Trifurcation

images-46Yesterday, Tech.pinions columnist, Patrick Moorhead, discussed the implications of the growing popularity of the 7 inch tablet form factor.


I think that Patrick’s analysis of the schism between Apple’s iOS tablets and Android tablets was spot on. While Apple encouraged their developers to create apps that were optimized for the larger 10 inch tablet form factor, Android eschewed optimization and encouraged a one-size-fits-all approach. The resulting “stretched” Android phone apps worked poorly on the larger tablet form factor. However, “stretched” phone apps seem to work well, or at least adequately, on the slightly smaller 7 inch screens.

This divide in approach between iOS and Android tablets has at least two major implications. First, Apple’s iOS tablets will most likely continue to dominate the 10 inch tablet form factor. In fact, Android has all but ceded the 10 inch form factor to Apple.

Second, because both Apple’s 10 inch iPad and their 7.9 inch iPad Mini run optimized tablet apps, the iPad will most likely become the “go to” tablet for high end users. This means that professionals, businesses, government entities and educators will gravitate towards the iPad. And as the virtuous cycle of developer/app/consumer continues the spiral upwards, the high-end iOS applications will make iOS optimized tablets even more appealing to high-end consumers and even less approachable to Apple’s competitors.


It seems to me that the tablet market is trifurcating. Apple’s iOS is taking the larger 10 inch form factor and the up-scale markets. Google’s Android may command market share in the mid-level markets. And forked or non-Google Android tablets will take the low end of the market. All can survive, but only Apple has proven that it can profitably thrive in such a setting.

Why Competitors Should Fear the iPad Mini

We have been conducting tiers of research trying to gauge consumer sentiment around tablets and in particular of late, the iPad Mini. Part of my interest with this research is designed to get deeper insight into the 7″ form factor in terms of perceived value and core uses cases for consumers versus the larger tablet form factors.

Bear in mind, when we do research it is rooted in ethnography and observational methods not surveys. We interview consumers and strive to understand things from their perspective. I like to explain it by saying we strive let consumers perspectives help shape our own rather than the other way around. That’s how Creative Strategies has done it for over 30 years and its never let us down.

Another thing worth mentioning for those not familiar with our work is that we target consumers in our interviews on specific parts of the adoption curve. Most of our focus is on the mass market consumer and late adopters not the tech elite and early adopters.

Our research on this matter will get packaged in a more formal way in the future but I wanted to share a few highlights.

Shifting Mindset

One thing I found interesting was that nearly everyone we spoke to who expressed interest in the iPad Mini, simply assumed the next version would include a Retina display. More interestingly this did not seem to be a deterrent to their intended purchase this holiday season. When I dug into why there was no interest to wait, the overwhelming consensus was that over time their intention was not just to own one but to own many. Ideally one for every person in the house. So the logic goes, when the new one comes out the older gets handed down. This used to be the logic for notebooks.

Price was certainly a driving factor for the interest of the iPad Mini over the iPad. But to many the price premium did not seem to be a deterrent. One of my key takeaways is that the perception with the iPad and the iPad Mini, relative to tablets, is that even though you pay more, you get more. This in terms of hardware and software quality as well as ecosystem and perhaps more importantly the experience.

The vast majority we interviewed had not owned a tablet yet and were on all parts of the economic scale. Those in the lower income brackets were also intending to research a few other tablets in the 7″ form factor. The leading three were the Nexus 7, Kindle Fire HD and Nook HD. Even with that bit of feedback over 60% said they were still leaning toward the Mini.

When we discussed the intended use cases for the iPad Mini, every single person with kids mentioned it as a part of their child’s educational process as a key use case. This did not surprise me. What did surprise me was that over half of those who brought up using it as a part of their kids educational process made the point that they believed the iPad would be used in schools in the future and making sure their kids were proficient with it was important and that they wanted their kids to use the same technology at home they will be using in schools.

This bit of feedback is very interesting. Here again we have a thought process that was used for notebooks and PC literacy skills being used for tablets. I truly believe we are moving into a touch literate world.

Some concluding thoughts. I firmly believe, now more than ever, that the tablet is taking the place in the hearts of many consumers as the new personal computer. This again cements in my mind the fact that this market will be much larger than the notebook and desktop market ever was and I believe even closer in size to the smartphone market than people realize.

Our research is continually bringing to light that consumers are thinking about tablets the way they used to think about notebooks. Validating again our conviction of a PC Cliff.

Continually we hear that although price is a consideration they don’t simply want cheap. Consumers are smart and they will pay for value. I believe way to many believe that price is the ultimate decision factor and our research continually validates that is not true. If the mindset around tablets continues to have emotional and personal appeal then there will always be a market for more premium experiences.

What I would be worried about if I am an Apple competitor is that the iPad, and perhaps specifically the iPad Mini, becomes the tablet that large portions of the market cut their teeth on thus becoming the standard. The iPad family, in my opinion, is the only no compromise general purpose tablet on the market. The bottom line is price not as big of a deal as we believe and consumers will pit the iPad against the competition (all which I have had extensive time with). That comparison, with the reality that price is not the ultimate driver, is what competitors should be most concerned about.

An iPad Mini Epiphany

So, I’m reading this article entitled: “Physicians excited about lab coat pocket-ability of Apple’s iPad mini” and I suddenly have an epiphany. Or, at least, a mini-ephiphany. Or indigestion. Not exactly sure which.

Anyway, it occurs to me as I’m reading this article that there is an entire sector of computing where the iPad, in general, and the newly minted iPad Mini, in particular, have no competition. They OWN this market.

From the article:

Epocrates, a maker of point-of-care applications for medical professionals, gathered data from 48 different physicians that use its products. One in three of those physicians said they are planning to purchase an iPad mini due to its convenient small size.

And earlier this year, one survey found that more than a quarter of European doctors use an iPad at work, while another 40 percent said they planned to buy an iPad within six months.

Emphasis added

They say that a picture is worth a thousand words. Try this thought experiment:

Picture a doctor walking from patient to patient, either in their private practice or in a hospital setting. Picture them inputing data into an iPad or using the iPad to share information with their patients.

Now picture them holding the iPad Mini in one hand and doing the same kinds of things…then slipping the iPad Mini into thier coat pocket.

An easy picture, no? The picture of the iPad works, but the picture of the iPad Mini – held in a single hand – just feels right, at least to me.

A Smaller Piece Of The Puzzle That Fits In More Places

In July, I wrote an article entitled: “The PC is the Titanic and the Tablet is the Iceberg. Any Questions?” The purpose of that article was to show how the tablet would undercut the PC because many of the things that the tablet did well, the PC did poorly or not at all. I went back and re-visted that article with the iPad Mini in mind.

Picture this:

Tablets excel at working while you are standing. The iPad Mini would do most of those tasks even better. Tasks done by matre d’s, inventory takers, tour guides, concierges, face-to-face service providers and order takers of every kind, would benefit from the use of the iPad Mini.

Tablets excel at working when one has to move and stop and move yet again. The iPad Mini would do those tasks even better. Car dealerships, like Mercedes Benz, are giving tablets to their salespeople. European doctors are rapidly taking to the tablet. Service technicians at Siemens Energy are using tablets while servicing power installations. Scientists are using tablets during field research. Nurses, realtors, journalists, park rangers, medical technicians…the list of users and uses is nearly endless. They would all benefit from the use of an iPad Mini.

If you’re in Sales, you’re into Tablets. For some salespeople, the larger iPad would make a better presentation device. For many others – and perhaps most others – the iPad Mini would do the job even better. Whether you’re traveling or standing or presenting or taking an order and acquiring a signature – tablets are a salesperson’s best friend. An iPad Mini would be more like a bosom buddy.

While the PC makes for a terrible Kiosk, the tablet is almost ideally suited to the task. Tablets as Kiosks are making their presence known in places as diverse as malls, taxi cabs, hospitals, the Louisiana Department of Motor Vehicles, and the FastPass lanes at Disney World. I think the larger sized tablet is more appropriate for a Kiosk that the iPad Mini. But the iPad Mini would be perfect for smaller spaces such as in car dashboards, taxi cabs, banks, and such.

Tablets are starting to show up as “loaners” that are lent out as entertainment devices. They’re being purchased by libraries. Airplanes run by Singapore Airlines and Qantas use them as in-flight entertainment devices. Airports like New York’s LaGuardia, Minneapolis-St. Paul International and Toronto Pearson International, lend them out to waiting passengers. The tablet is ideally suited for the task. It is light, it is portable, it is versatile, it displays content beautifully and it is sublimely easy to use. If the larger size tablet is ideal, then the iPad Mini is a dream come true.

PCs in schools are mostly relegated to teachers and computer labs. Tablets live in the classroom and they reside in the hands of the students. No one wants to learn HOW to use computers anymore. Students simply want to use computers to help them learn.

The tablet is starting to take educational institutions by storm. It acts as an electronic blackboard, as a digital textbook and as an interactive textbook.

It’s at the K-12 level (the San Diego School district just ordered 26,000) and at the Universities (Adams Center for Teaching and Learning at Abilene Christian University, George Fox University, North Carolina State University in Raleigh). Tablets are even finding their way into the top-tier high schools in China.

Some schools have even reported a 10% improvement in the exam scores of students who use tablets in lieu or paper books.

We’ll have to see how the education market sorts itself out. But for smaller children at least, the smaller size of the iPad Mini seems like the perfect teaching tool.

The Competition Comes Up Small

Now try to picture any of the above tasks being done with an Amzaon Kindle Fire, Google Nexus 7, or Microsoft Surface? More difficult, right?

— The Amazon Kindle Fire has little chance because it has no tablet optimized apps and because the tablet is designed to pull the user into their store.

— Nexus has little chane because it has no tablet optimized apps and because it relies on content and ad sales in order to make money.

— Windows Surface has little chance…yet.

Microsoft is very good at ecosystem, but their tablet offerings are currently unsuitable for the one-handed tasks that I listed, above. First, their tablets are too large. Second, the 16:9 ratio makes them awkward to hold in portrait mode. Third, their current iterations seemed focused on surface use, not hand held use. Fourth, and most importantly, they do not currently have the job-specific apps necessary to perform the required tasks.

Job Specific, Proprietary Apps Are The Key

It is this last point that I want to dwell upon for a moment. When the press and the pundistocracy talk about apps, they usually focus on the big ticket items like Angry birds, Instagram, Facebook, Flipboard, etc. But the key to Apple’s app dominance are the untold number of proprietary, job specific apps designed by and for doctors, hospitals, park rangers, restaurants, entrepreneurs, businesses, educational institutions and government entities. THAT’s where the power of apps lies.

Neither the 9.7 or the 7.9 inch iPad tablet are competitor proof. But if you need a hand-held tablet that’s serious about apps, then no one competes with the iPad Mini in that space.

Let’s Talk About the iPad Mini and Ultra-Mobile Computing

[dc]A[/dc]pple announced today that they sold 3 million iPad Mini (Wi-Fi version) and fourth generation iPads in three days. Through some smart discussions with some folks who track supply chain shipments, I estimate that around 1.7 to 2 million of those were iPad Mini’s. Call it an educated guess. Any sane person who saw the product in person and understands the value of tablets to the end consumer, would not be surprised with the Mini’s success. I have a hunch the iPad mini will be one of the hottest sellers this holiday season.

I have had the iPad Mini since Friday and I have observed some interesting things.

An iPad For Everyone

I am drawn to big screens. As impractical as it absolutely would be, I would own the biggest possible HDTV imaginable. However, there are many who are much more practical in these matters than myself – like my wife. This is why the diversification of the tablet form factor, and in this case the iPad, is an important move. The market favors options, and this includes the portfolio from single brands.

We have already heard quite a bit about the iPad Mini in education, particularly k-12, and I do believe it has a great deal of upside in that market but there are a few other segments that I think are particularly interesting for the iPad Mini. Specifically women and China (Asia).

My wife and kids already prefer the iPad Mini over its larger brother. I still use the iPad heavily but I have integrated it into my life in ways most have not and depend on it for a large percentage of my computing tasks. What makes the mini such a delight to use is how easy it is to hold. This, in my mind, has always been the attractive feature of the smaller form factor tablets. This may be the practical feature that many, particularly women, may appreciate about the iPad Mini.

Asia is a market that loves miniaturization. Through the decade plus I have been and industry analyst and have studied the global consumer market, I have been shocked at the ultra-small gadgets and PCs that are particularly popular with Asian consumers. This is why, in my opinion, the iPad Mini is so strategic for Apple in China. Its unique form factor, rich ecosystem of apps, and specific software innovations for the Asian market, give it one of the strongest tablet strategies for Asia. Of course the lower price helps as well.

The iPad Mini represents an option as a part of a portfolio of computing devices from Apple. For many it will be the perfect iPad.

Let’s Go Outside

One of my working hypothesis with tablets, is that their more mobile form factor, allows us to take computing to locations where notebooks can’t or are not suited for. As we have studied tablet usage from a variety of different vantage points we continually come across use cases where tablets are being used in much more mobile context than notebooks. Particularly because one can stand up, walk around, be truly mobile and still use the device.

This is the usage model that I thought would lead the iPad out into the world more often. I have seen people using their iPads at the beach, park, walking in the city, etc., but now having used the Mini, I think this product has a shot at being the iPad we see being used out in public regularly.

The case for this ultra-mobile iPad may be made even stronger with the WAN connected Minis and could spur entirely new usage models for pervasively connected mobile computers.

Going back to the appeal of the Mini for women for a moment. Women are uniquely positioned to embrace this ultra-mobile personal computer because most of them regularly carry a bag or purse in which to store it. The Mini fits into few of my pants back pockets but realistically I would never carry it in my pockets.

To be entirely honest, it was this big screen, connected mobile experience that I genuinely liked about the Galaxy Note 5.3 inch phone. That device was just too clunky as a phone to fit the bill in my opinion. The Mini could lead us into some interesting areas if it not only leaves the house, but gets used in places currently only smartphones get used.

Let’s Play Some Games

Another area that stood out to me with the iPad Mini was gaming. And not just casual gaming, full on immersive, hard core gaming experiences.

I grew up in the Nintendo and beyond era. Even as I got older and had a family, I still enjoy a long gaming session from time to time. I was surprised over the past few years to see so many non-casual and more hardcore immersive games (particularly first person shooters) showing up on the iPad. I tried many of these games and just couldn’t take to them. At first I thought it was the virtual D-pad but now I think it was simply the size of the iPad. Although not impossible, it is awkward, to hold the iPad two handed and still easily use a virtual D-pad and soft buttons on the screen. All that goes out the window with the Mini.

I was pleasantly surprised how great of an experience gaming is on the iPad Mini. I have any number of dedicated mobile gaming consoles and I have to say the Mini is on par with all of them.

We all know games are particularly compelling on tablets, and although there are a number of hardcore and immersive games for the iPad, I am not sure how well they are doing. All of that may change if developers catch wind of the iPad Mini as a gaming platform. The iPad Mini could very well be the device that brings Apple into an entirely new level as a gaming platform.

I am excited to see where Apple, developers, and the market take the iPad Mini. This is a fresh new form factor, and one that absolutely has a different appeal and experience than the iPad. I expect some evolving will happen with both platforms as the consumers try and evaluate both to see which ones meet their needs exactly. This is why it is important to have choice. Not all consumers prefer the same solution, and for Apple’s key growth products–which the iPad is in–making sure there are options for all types of consumers and market needs is essential.

Selling The Amazon Kindle Fire and Google Nexus 7 Is As Silly As Selling Razor Blades To Men Who Love Beards

Gillette, Amazon, Google and Apple

— The Gillette business model is to give away the razor in anticipation of making profits from the sale of the blades.

— The Amazon business model is to give away the Kindle Fire for cost in anticipation of making profits from the sale of content and ads.

— The Google business model is to give away the Nexus 7 for cost in anticipation of making profits from the sale of ads and content.

— The Apple business model is to sell the iPad Mini for a profit…AND in anticipation of making additional profits from the sale of content and ads.

The razor blades business model

“(T)he razor and blades business model, is a business model wherein one item is sold at a low price (or given away for free) in order to increase sales of a complementary good, such as supplies (inkjet printers and ink cartridges, “Swiffers” and cleaning fluid, mobile phones and service contracts) or software (game consoles and games).

Though the concept and its proverbial example “Give ’em the razor; sell ’em the blades” are widely credited to King Camp Gillette, the inventor of the disposable safety razor and founder of Gillette Safety Razor Company, in fact Gillette did not originate this model.

The (razor and blades) marketing model may be threatened if the price of the high margin consumables in question falls due to competition. For the (razor and blades) market to be successful the company must have an effective monopoly on the corresponding goods.”

~ via Wikipedia

Three Flaws

There are (at least) three flaws in the Amazon Kindle Fire and the Google Nexus 7 business models:

1) No proof of sales;
2) No proof of profits;
3) No monopoly (proprietary) pricing available.

1) No proof of sales

The razor and blades business model works, in part, because when the razors are given away at cost or for free, they become ubiquitous, thus making it convenient for razor owning customers to purchase the company’s proprietary blades. There is no evidence to indicate that either the Amazon Kindle Fire or the Google Nexus 7 are selling well despite their subsidized sales prices.

It’s been estimated that the original Amazon Kindle Fire sold 4.7 million Kindle Fires over a 9 month span and that the Google Nexus 7 sold 3 million units last quarter. These numbers are estimates because neither Amazon nor Google are willing to release the actual sales numbers.

When you consider the fact that these are both subsidized products being sold at cost, those numbers are remarkably low.

2) No proof of profits

The razor and blades business model works, in part, because when the razors are given away at cost or for free, the profit is made from the blades. There is no evidence to indicate that either the Amazon Kindle Fire or the Google Nexus 7 are making substantial profits from the sale of content or ads. In fact, when you look at the company’s recent quarterly earnings reports, there is evidence suggesting that they are NOT making significant revenues or profits from tablet related content and ad sales.

3) No monopoly (proprietary) pricing available

The razor and blades business model works, in part, because the blades are proprietary and command the premium price neccessary to offset the lack of profit from the giveaway of the razors.

For the (razor and blades) market to be successful the company must have an effective monopoly on the corresponding goods.” ~ via Wikipedia

The Printer Example

Computer printer manufacturers have gone through extensive efforts to make sure that their printers are incompatible with lower cost after-market ink cartridges and refilled cartridges. This is because the printers are often sold at or below cost to generate sales of proprietary cartridges which will generate profits for the company over the life of the equipment.

The Game Console Example

(V)ideo game consoles have often been sold at a loss while software and accessory sales are highly profitable to the console manufacturer. For this reason, console manufacturers aggressively protect their profit margin against piracy by pursuing legal action against carriers of modchips and jailbreaks.

Atari had a…problem in the 1980s with Atari 2600 games. Atari was initially the only developer and publisher of games for the 2600; it sold the 2600 itself at cost and relied on the games for profit. When several programmers left to found Activision and began publishing cheaper games of comparable quality, Atari was left without a source of profit.

~ via Wikipedia

Neither the Amazon Kindle Fire nor the Google Nexus 7 have a monopoly on the content or the ads that they sell. They cannot command a premium price. In fact, if anyone can command a premium price on the sale of content, it is Apple because of their extensive distribution channels. While Apple is able to sell content in over 90 countries, the content sales channels for both Amazon and Google are extremely limited.

Cheaper is not necessarily better

There are rumors that Google may announce a $99 Nexus tablet next week. But in a subsidized model, cheaper is not necessarily better. In fact, it could be counter-productive.

The razor and blades business model works, in part, because when the blades are given away at cost or for free, they become ubiquitous, but there is no point in giving away the razors to men who love having beards. Similarly, there is no point in selling low-cost Amazon or Google tablets to customers who don’t buy their content or consume their advertising. Subsidized products attract bargain hunting customers and bargain hunters are as useless to Amazon and Google as bearded men are to Gillette.

The non-existent “Price Umbrella”

Apple is being criticized for selling the iPad Mini at $329 and leaving a “price umbrella” under which the likes of Amazon and Google tablets can grow and prosper.

There is no price umbrella. The Amazon Kindle Fire and the Google Nexus 7 are zero-margin products.

Let me say that again. Amazon and Google make zero profit from tablet sales.

No matter how much Apple lowers its sales price (and its margins) it won’t be taking any profits away from the Amazon Kindle Fire and the Google Nexus 7 because they already make no profits.

Now there is an argument to be made that lower Apple iPad Mini prices might reduce Amazon’s and Google’s tablet sales and therefore lower Amazon’s and Google’s tablet related content and ad sales. This presumes that lower iPad Mini prices would spur higher iPad Mini sales. If the iPad is supply constrained, (i.e,, Apple can’t make enough of them) this argument fails.

Further, both the Amazon and Google tablets are already selling poorly. And there is absolutely no evidence that Amazon or Google are making more than, or even as much as, Apple is in content and ad sales. Lower iPad Mini prices would have a negligible effect on Amazon’s and Google’s ethereal profits but it would have a significantly negative affect on the iPad Mini’s margins.

Giving razors to men with beards

“Never interrupt your enemy when he is making a mistake.” ~ Napoleon Bonaparte

Apple doesn’t need to lower its pricing to deliver “the tablet death blow” to its competitors. Apple’s competitors are doing a fine job of starving themselves of profits as it is.

When your competition is giving razors to men with beards and hoping to make their profits on the sale of blades, you don’t attack them – you ignore them.

Why Apple Is Keeping the iPad 2 [UPDATED]

iPad 2Some commentators have expressed surprise that Apple is keeping the iPad 2 in its lineup after announcing what it calls the fourth-generation iPad on Oct. 25. The company’s normal practice would be to keep the n-1 product while dropping anything older. Instead, Apple dropped the third-generation iPad announced just last spring.

But when you look at the products, this call is not at all surprising. The key is that it’s a big stretch to call the new iPad (the 9.7” version) a fourth-generation product. All that is new for the iPad announced this spring is a processor bump from the A6 to the A6X and the replacement of the 30-pin dock connector with the new Lightning connector used on the iPhone 5 and the iPad mini. If Apple hadn’t already had an event scheduled, this announcement probably would have been made by press release.

Then there’s the question of pricing. There’s probably very little difference in the bill of materials between the new-new and the old-new iPad. So dropping the price of the third-generation iPad to $399 to maintain a $100 differential between the products would have forced Apple to take a significant margin hit. So the iPad 2 stays and the third-gen version is retired.

The real fourth-generation product is the mini. Although it uses a non-retina display and an older processor, it is amazingly thin and light. Its stunning new case, made with a new manufacturing process, echoes the design language of the iPhone 5.

I expect that come next March or April, Apple will hold its by-now traditional iPad announcement. Then we will really see a new-generation product. Look for a thinner, lighter tablet with the perfect chamfered bezel edge that is Apple’s latest design hallmark.


The announcement of the new iPad has set off a remarkable and totally unjustified chorus of whining, such as this piece by Cnet’s Roger Cheng, “thanking” Apple for rendering his months-old third-generation iPad obsolete. It’s no more obsolete today than it was on Monday. It’s true that the new iPad features a faster processor, but I haven;t heard anyone complaining about the current model being slow.

iPad Mini: The iPad in the Palm of Your Hand

Today’s Apple event was perhaps one of the more interesting to me for a variety of reasons. Apple made a number of announcements that in my opinion give them a strong lineup for this holiday season. Apple has made advances in almost every one of their products in just the last few months. But all eyes today were on the newest member of the iPad family–The iPad Mini.

It took me a long time to come to grips with the reality that Apple was making a smaller iPad. If you have read much of what I have written over the past few months, I explain my belief that the iPad has not yet reached its full potential, and I was concerned that releasing a smaller iPad may deter or delay the iPad reaching its full potential. I was also very keen on some specific and unique positioning for the iPad mini as I stated in a column last Friday. I still believe specific features for families and communities are important going forward but after soaking in the breadth and depth of the Apple announcements from today’s event, my thinking has altered slightly.

It Fits in the Palm of Your Hand

For me the moment of clarity, was when they showed a slide of the new iPad, the iPad Mini, being held comfortably in the palm of a hand. This slide was articulated with the key point that this iPad, the iPad Mini, can do something the iPad can not–fit in the palm of your hand.

This has clearly been a benefit of the 7″ tablet experience if you have ever used one. There was something to being able to hold it easily in one hand. In fact in many of my columns on the 7-8″ tablet form factor, many of our smart commenters remarked on their excitement, or anticipation, of the 7″ tablet form factor because of it being lighter but also easy to hold with one hand.

This is certainly the draw back of the iPad in some but not all use cases. For example, reading on the iPad while laying in bed, reclined, or any position where you are holding the tablet with one hand can be uncomfortable if done for long periods of time. I was thinking about this the other day as I was reflecting on how much I like reading with the Kindle Paperwhite. The primary reason being because it is very light and holding it up for long periods of time during reading requires almost no effort. Paper books are light, and easy to hold. Smaller tablets and e-readers mimic a very natural book like feeling because they are light. This is one of several clear advantages of the smaller tablet form factor.

The first thing that struck me with some of the time I spent handling the iPad Mini was how light it was. By contrast the Kindle Paperwhite with 6″ screen size is .47 pounds and .36 inches thick. The iPad mini is .68 lbs and .28 inches think. I brought my Kindle Paperwhite to the event and held them simultaneously. It was tough to tell the difference in weight.

By taking on the task of delivering a smaller iPad to the market, Apple has in turn designed one of their best iPads yet. But the smaller form factor and cutting edge design is not the only part of the story.

How is it Different than Competing Smaller Tablets?

The answer–as is the case with many platforms–is apps. I was wrong (at least for now) in my initial assumption that the smaller screen size would require custom made apps for the small screen. Apple, by making the screen 7.9 inches, was able to keep the identical resolution as the iPad, so all apps run and look exactly the same. Although slightly scaled down, the apps function and look exactly the same on both the iPad and the Mini. The iPad Mini is literally a full iPad experience in the palm of your hand.

As I reflected on this, I realized I have never personally experienced scaled down tablet apps on a smaller tablet. This is because 7″ Android tablets run scaled up apps built for the smartphone. This means you are running a small screen app and user interface on a larger screen. Apps built for the small screen, were built for just that, a smaller screen.

Yelp on Nexus 7 vs. iPad Mini
Apple showed side by side comparisons of the same smartphone app running on the Nexus 7 and the same iPad app running on the iPad mini. This image is the only one you would need to see to grasp the full value of Apple’s approach with the iPad Mini. The difference in the software experience between a smaller tablet running smartphone apps and a smaller tablet running tablet apps is night and day. The bottom line is that there are only a few hundred tablet apps for Android and several hundred thousand for iPad. This alone gives the iPad Mini a clear and distinct advantage in my opinion. Whether that experience is worth the extra money for consumers will be up to them, but I know it would be worth it to me.

This experience is so new, that it will take time to form a more lengthy analysis of its potential impact. However, what Apple has done with the industrial design is more than impressive. At .68 lbs, 7.2 mm thin, with a 7.9″ screen, running all the over 250,000 iPad apps, Apple has brought the full iPad experience to the palm of a hand. And with an entry price of $329 my guess is it will get into more palm’s than ever before.

The BIG Opportunity for the iPad Mini

Let me start this column off explaining why I was skeptical of a smaller iPad in Apple’s offering. I have been bullish on tablets from the beginning. From my first experience with the iPad I knew Apple was on to something. In my opinion the iPad in its current form has not reached its full potential as a personal mobile computer. Because I am convinced this is true, the scenario of a smaller iPad that would inevitably cannibalize and potentially delay the potential of the iPad in its current form seemed like a poor long term strategy. However, something I have been thinking about lately may be the key for these products to co-exist and fulfill fundamentally different needs of consumers.

I’ve convinced myself that for Apple to have two different sized iPads, they need to be positioned differently and poised to tackle different market needs. Unlike notebooks, where screen size is partially a matter of preference, but also a matter of primary tasks, tablets play a different role in the lives of consumers. I am a big believer that the iPad in its current form can suffice for many mass market consumers as a notebook replacement. I do not believe the same is true of of a smaller iPad. These two different sized iPads will also offer different software experiences. I do not believe that we will simply see scaled up iPhone apps or scaled down versions of current iPad apps on an iPad mini. This product will shine with custom applications and experiences built for the new screen size.

From Mine to Ours

The BIG opportunity I see for the iPad Mini is to cater to how families or communities use these devices as shared screens in a communal environment. I’ve articulated this before, the concept of a shared screen versus a personal screen, and I think the 7-8″ tablet may represent the perfect form factor for a shared device. Take for example what both Amazon and Barnes and Noble have done in this space.

The Amazon Kindle Fire HD tablet with its FreeTime feature is a solid step in the right direction toward family tablet computing. This solution offers parents the ability to set parental controls for their kids so as they enter FreeTime mode, children are presented with a kid-friendly user interface and access to only approved applications and abilities. Parents can also set limits on how many hours per day kids can play games or watch videos.

Barnes & Noble took Amazon’s important FreeTime concept even further by introducing profiles to the Nook HD. This allows consumers to set up a number of different profiles for each family member. This way, when a particular user logs in, they see only the books, magazines and applications that are of interest to them. Another well thought out part of profiles is that if two people are reading the same book in different profiles, the Nook HD will keep each person’s last read point for them so that they’re not constantly trying to find where they left off. User profiles deliver powerful features and are the best example to date of how a tablet can deliver on a shared family computing experience.

These are experiences that I think shine on a communal or shared screen. These experiences can exist of course on larger tablets but I have a hunch that the smaller tablet form factor will encourage the shift away from the sentiment that the device is mine to the device is ours.

This shift in sentiment from mine to ours could pave the way for entire new software experiences. Just looking at the previous examples I gave from Amazon and Barnes and Noble, show how they are thinking uniquely about this from a software standpoint. I would argue that Apple’s ecosystem is even stronger across the board when you incorporate others screens as well as iCloud to foster and embrace the shift of some devices being ours rather than mine.

What encourages me about this thinking is that it genuinely appeals to the way consumers are using these devices. Some products fit well as a personal product. My smartphone for example is mine and is tied to me in unique ways. The smartphone will also be mine and never ours. A notebook also follows very personal use cases and highly personalized to the individual. The tablet however may be owned by one person but still shared by many in family environments. It is something unique to the tablet form factor that it can comfortably be mine and ours simultaneously. But to my point above, I believe that the smaller tablets those in the 7-8 inch range fit this new paradigm nicely.

Now, I have no idea if the iPad Mini will launch catering to anything I’ve proposed in this column. My point is that whether or not Apple believes it, I believe this is the big opportunity for a smaller iPad. It would be uniquely positioned and create a strong loyalty and stickiness to Apple’s ecosystem for not just the individual but the family as a whole.

The iPad Mini Hits Windows 8 Where It Ain’t

Tim Bajarin muses on whether it was a mistake for Microsoft to focus Windows 8 on the the larger screen sizes:

When Microsoft decided to get into the tablet business again, it pretty much committed to 9- to 11-inch tablets, mostly eyeing the business market.

… it is clear that Microsoft will stay this course and will not manufacture 7-inch Windows 8 tablets directly or through a partner any time soon.

I believe this is a major judgment error by Microsoft because the plethora of 7-inch tablets coming out soon will become a huge hit with consumers.

Consumers appear to be extremely interested in an iPad mini, but I predict many business users will also fancy it…(too)

Tim goes on to make several excellent points. I would add this. I think the rumored iPad Mini will be a MONSTER hit in education. The current iPad is taking education by storm and the rumored iPad mini will turn the current torrent of iPad adoptions into a virtual flood.

Microsoft is in a very tough spot. They need to get into tablets. They are wise to go with their strength (business). But they can’t neglect education either. It may sound trite, but children are the future. Kids are already enamored with the iPhone and the iPad. Microsoft is in a dog fight to recapture this generation of tablet users. However, if they let the iPad become the de facto standard in education at the K-12 and college levels, all their efforts may be for naught. While they’re busy fighting for today’s customers, they will have already lost tomorrow’s.

Re-Thinking The iPod Touch And The iPad Mini

Last week, my colleague Steve Wildstrom asked: “Is There Room in Apple’s Lineup for an iPad Mini?” I had the very same question and I was one of the very first to say so in the article’s comment section. However, after reading more on the matter and upon further reflection, I’m re-thinking my position.

With the rumored iPad mini on the horizon, I would have said that Apple was going to de-emphasize – if not discontinue – the iPod Touch. Instead, Apple did a major upgrade. How major? In addition to significant spec bumps, they added:

— 4″ Retina display
— A5 Chip (same as in the iPhone 4S)
— iOS 6
— Siri
— Airplay Mirroring
— Shared photo streams
— Dramatically improved, 5 megapixel iSight camera with autofocus, flash, Facetime HD and Panorama.

But it was the pricing that was the most perplexing. The new Touch, which will ship some time in October, will be priced at $299 for a 32 gigabyte model and $399 for 64 GB. With the new iPad starting at $499 for a Wi-Fi-only 16 GB model and the iPad 2 priced at $399, where does the rumored iPad Mini fit in?

I’m now speculating that the Ipad Mini will be priced the same, or nearly the same, as the iPad Touch. Counter-intuitive? Yes. Un-Apple like? Maybe not.

Apple has never been afraid of cannibalizing their own products. But one thing they have always feared and avoided was category confusion. Except during times of transition, Apple is fanatical about keeping their product lines distinct.

Marketing students and fans of the book: “The Paradox of Choice”, will understand Apple’s resolve in this matter. Confusion is the enemy of sales. Apple keeps its product lines far apart so that you know, almost intuitively, which device is the one and only one that will fit your needs.

So how would that work with the new iPad Touch and the rumored iPad Mini? If they have the same price, wouldn’t that cause massive consumer confusion? Not really. Here’s why.

Apple is clearly aiming the new iPod Touch at kids. In addition to all of the features described above, the new iPod Touch comes in kid-friendly colors and with a kid-friendly carrying Loop. Further, at the event where they announced the new iPod Touch, Apple heavily emphasisezed the iPod Touch’s ability to watch movies on its wide-screen display, the 1750,00 available games and the 150 million players made available via Game Center.

Apple is positioning the iPod Touch as a device for kids.

And the iPad Mini? It’s hard to know how Apple will position it since it doesn’t yet exist. But here are a couple of things that I think will differentiate it from the iPod Touch:

— It won’t fit in your pocket
— It won’t have a Retina Display
— It will run iPad – not just iPhone – Apps
— It will be 3G, and possibly LTE, capable

I believe that Apple is going to position the iPod Touch as the device for kids and the iPad Mini (or whatever it might be called) as a personal iPad – useful for everything an iPad can do except for screen intensive Applications.

I’ve always thought of the iPod Touch as Apple’s stealth iOS weapon. Virtually without competition, it gently ushers a younger generation into the world of iOS. And once they are there, what could be more natural than for those iPod Touch children to transition into iPhone and iPad carrying teens and adults?

Apparently, Apple feels the same way. They’ve sent a strong signal that the iPod touch is here to stay. And the rumored iPad Mini? Well, we won’t be able to say for sure until it actually exists. But I no longer think that the iPod Touch and the iPad Mini have much overlap with one another. Even at the same prices, they serve two very different purposes and two very different markets.

Why Apple Needs a 7 Inch Tablet

Last week, most of the tech industry was consumed with Google I/O, Google’s annual event to woo software and hardware developers to Googlenexus 7 and consequently away from Apple and Microsoft.  In addition to Google Glass-adorned daredevils jumping out of blimps and scaling down the sides of buildings, the Nexus 7 Tablet, the first full-featured, no-compromise tablet was launched at $199.  What’s very clear is that the Google Nexus 7 will sell well and take business away from Apple’s $399 iPad 2.  This is exactly why Apple needs a 7” tablet or else face the prospect of losing market share and profit dollars.

The Kindle Fire was released back in September 2011 to big fanfare.  I was accurate in stating it would take share away from the $499 iPad 2, which was true until the iPad 3 was launched and iPad 2 reduced down to $399 back in February.  The situation has changed now as the Fire is slogging away and is losing share to the iPad 2 and even to the $199 Nook Tablet and the $169 Nook Color.  It makes sense, as the Fire is a stripped down tablet and the iPad 2 is not, and many consumers were willing to pay the extra $200 to have the full experience.  The Fire used a smartphone operating system, had an SD display and users got a large smartphone experience.  It wan’t a great experience, but it wasn’t horrible, particularly at the ground-breaking price point.  The Fire also lacked access to the broad Google Play content and application environment, too, which, to some, was limiting.

The Google Nexus 7 Tablet is an entirely different animal.  It comes with the top of the line NVIDIA Tegra 3 with 4-PLUS-1 processor, the latest Android Jelly Bean OS, NFC, an HD display, camera, microphone and full access to the Google Play store. After seeing Jelly Bean in action, it is a marked improvement over prior Android operating systems  I have used that just didn’t quite feel right and toward which I have been so critical.  The Google Nexus 7 will sell well, which is good for Google, Android, ASUS and NVIDIA, but bad for Apple, unless they act before the holidays.

Historically, Apple has been OK taking the high road on unit market share, particularly in PCs.  The situation changed with the iPod, iPhone and the same is true for iPad.  Apple wants market share and will do what it takes to get it, as long as it’s profitable, they can deliver a great experience, and stay true to their brand. Apple could do just this with a 7”, $299 tablet. Apple would be very profitable as well, as the most expensive piece-parts of a tablet are the display and touch-screen, which are priced somewhat linear with size. Apple may have redesigned some of the innards of the new iPad 2 as they lowered the price, but not nearly enough to offset the $100 price reduction, so a mini-iPad would be additive, not dilutive like the $399 iPad 2.

Would consumers pay $100 for the Apple brand and experience?  In most traditional geographies, yes, they would, as consumers have shown the willingness to pay more than $99 more for iPods and $199 more for iPads.  This is exactly what the mini-iPad would be; a large iPod.  That’s not bad, that is good in the sense that  the iPod is still the most popular full-featured personal media player out there.

Will Apple productize what they undoubtedly have running in their labs?  I will leave that to the numerous Apple rumor sites, but one major occurrence suggests they will not, and that was one of the great proclamations from the late Steve Jobs.  According to Wired, in October of 2010, Jobs apparently said the following during an earnings call: “7-inch tablets are tweeners: too big to compete with a smartphone and too small to compete with the iPad. These are among the reasons that the current crop of 7-inch tablets are going to be DOA — dead on arrival.” Does this say Apple would never do a 7” tablet?  Actually it does not, as it is really a statement about non-Apple products and  Jobs left Apple some wiggle room to maneuver.  What I know for sure is that Apple must act in the next few months or risk tablet share degradation to the Google Nexus 7.