The Fallacies of How To Compete with the iPad

Ben Bajarin / April 20th, 2012

I take articles like this claiming the iPad will drop below 50% market share by as early as next year with a grain of salt. I don’t want this article to be about all the reasons why we believe the iPad will maintain significant market share, we have written quite extensively about those reasons. I’d rather examine a few flaws in competitors thinking about how to compete with the iPad and to do that I’d like to start off by making a point. I genuinely believe that it is possible to compete with the iPad. I don’t think it’s easy. I don’t think many companies can; but I don’t think it is impossible.

There is always room to innovate. The problem is simply that the companies attempting to create competing touch computers don’t understand touch computing or the market dynamics for tablets. It seems as though many vendors and software platform providers believe that by simply slapping a touch screen on a piece of hardware, regardless of what that hardware looks like, that it will hit the market and instantly be competitive. This is the fallacy number one.

Touch computing requires a touch based ecosystem. This is everything from carefully designed hardware, software, and to a degree services, all around touch (not mouse and keyboard) as a computing paradigm. This is no trivial task. Android is a weak touch computing ecosystem in my opinion. Mostly due to Android being an advertising strategy not a software strategy to Google. Time will tell with Windows 8 what kind of touch computing platform it truly becomes. Windows 8’s success rests largely on the hardware manufacturers and software developers ability to understand touch computing and develop a truly competitive ecosystem.

Fallacy number two is that the number of designs in the market on a particular platform is a competitive advantage. When I ask why a particular platform release may be competitive, often number of designs is the answer. “There will be over xx designs in the market,” is a phrase I hear often. I don’t believe that number of designs alone makes a particular platform competitive. In fact, it is perhaps quite the opposite. There is a book I like to reference called The Paradox of Choice by Barry Schwartz. The overall premise of this great book is that too much choice or too much variation in choice can overwhelm the purchaser to the point of frustration and lead to the inability to make a decision. My concern with too many products on a particular platform is that consumers may find the decision making process painful and confusing. This is why I believe there is a lot of merit to the argument for very limited product offerings per vendor and per platform to a degree.

Fallacy number three is that low cost always wins. I don’t believe that today’s consumers in mature markets want things that are cheap. I believe they want things that are valuable to them at a personal level. A key point to understand is that in mature markets what is valuable varies quite a bit. This is because in mature markets consumers make specific purchases for specific reasons. Often in mature markets consumers know roughly what they want, why they want it, and they are shopping with a pre-set of conditions. What one segment finds valuable may not be the same as another group. This is why product segmentation is important. The key is to create products in a segment–hopefully a large one– that consumers in said segment find valuable. In the automotive industry, for example, minivans target a segment, trucks target a segment, motorcycles target a segment, economy cars target a segment, and so on and so forth. In this case, the automotive manufacturer understands the segment a product is being created for and then innovates and delivers solutions to meet that segments needs on an annual basis. This understanding of the market dynamics for tablets is what I think is largely being missed by those desiring to create competitive tablets.

The question anyone who desires to create a tablet to compete with the iPad needs to answer is “What will my tablet do better than the iPad.” And what can they do with it that they can’t do with an iPad?

If there is not a well reasoned answer to this question then get back to the drawing board and innovate. The answer may not be obvious or easy to figure out but just trying to be me too is a recipe for disaster. Perhaps if these new Windows tablet vendors can create a product that is unique, does specific things the iPad doesn’t, and meets additional needs that the iPad can’t (or Apple isn’t interested in), then they might have a chance to truly deliver a competitive product that gains market traction.

Ben Bajarin

Ben Bajarin is a Principal Analyst and the head of primary research at Creative Strategies, Inc - An industry analysis, market intelligence and research firm located in Silicon Valley. His primary focus is consumer technology and market trend research and he is responsible for studying over 30 countries. Full Bio
  • mhikl

    Too many choices does seem like throwing a fist full of darts at the board hoping that one or some will hit the central circle or better yet, the inner bull. Apple, as you point out, aims its product at the bull and that is where the iPad sits at the moment.

    Confidence can be well earned or set in the eye of propagandists. Apple has well earned the confidence of the consumer with its iPad; it will soon be known if Intel & MicroSoft’s confidence will matched it in the marketplace.

    Your analogy of the automobile industry is apt. I believe you have used it before, Ben. Regardless, from what source I read it, it struck a cord. I like your refinement on my understanding the segments. That is where my curiosity lies and that is where I suspect MicroSoft’s endeavours will live or die; not on its desire to supplant the present king player. It is also why I think people like Mr Brookwood may be happier if Intel and Microsoft are successful in their segment of the tablet market. In the choice between successful competitors, choice is always good, even if you can’t see the value in another person’s choice. But it does sound like Intel and MicroSoft are continuing down old paths and the saturation of their tablet market with too many choices will thwart their objective.

    • benbajarin

      Yes to your last few points that is what is most concerning to me at an industry level. Granted, its not easy to segment a market that is in the beginning stages of segmenting. But I can point the failure of many attempts to a lack of substantial innovation for a specific set of use cases or market segments.

      RIM for example, in my opinion, just needed to do mobile email (and maybe a few other things) better than anyone else and I think they would have remained competitive. That is a simple use case but for someone who lives and dies by email thats a key feature.

      Plus I didn’t elaborate much in this piece on my end statement about pinpointing things competing products do or can do better than the iPad. Right now the iPad does a lot pretty darn well.

  • I’m going to write a separate post discussing the contents of this article. But I just wanted to take the time to say: “Ben, you write some awfully good stuff.” Here’s one of your more insightful articles and you’re getting almost zero feedback!

    Well, here’s some feedback. Keep doing what you’re doing. It’s great, great, stuff.

    • benbajarin

      Thanks for the feedback and the kind words! It is much appreciated. Most of what I write is the kind of stuff that occupies my brain most of the time. I am just glad other people than myself think it is interesting 🙂

  • Starman_Andromeda

    Agreed! 100% on the money. A good article, with good insights. Also glad to see Barry Schwartz and The Paradox of Choice mentioned.

  • “Fallacy number two is that the number of designs in the market on a particular platform is a competitive advantage.”

    Your discussion of Barry Schwartz and the Paradox of Choice is spot on. Here’s the mistake people are making:

    – When force is used to restrict choice, more choice is almost always good. That is why modern political theorists so revere choice.

    – When choice is optional – when we can choose or choose not to choose – more choices are almost always confusing, even debilitating. The more choices we have, the more likely we are going to choose not to choose.

    There is also a third facet to consider that most armchair pundits simply ignore. More options are no better than fewer options if the additional options are no better than the options that are already available. Apple’s competitor’s need to stop saying: “We’re giving consumers more choice” and start asking: “Are we giving consumers a better choice?”

    “Fallacy number three is that low cost always wins.”

    Value, not cost, is what matters. Cost is a single component of value and clearly not the most important component. If cost were all that mattered, then we would own the cheapest of everything but a quick survey of what we’re wearing, what we drive and how we furnish our homes will quickly disabuse us of that notion.

    Value is not about money alone. Value is about what something is worth TO US. If we value something more than we value the money it takes to acquire it, then we happily make the exchange. The high priests of price will never understand this because they think everything is a commodity and that price is the only god worth worshiping. Apple has proven again and again that the value they add over and above the mere existence of a piece of glass that responds to touch is what matters most to consumers.

    Until competitors learn to OUT VALUE the iPad instead of under pricing the iPad they will remain baffled and vexed by Apple’s seemingly inexplicable success and their seemingly inexplicable failure to compete.

    “(F)allacy number one …Touch computing (does not) require a touch based ecosystem.”

    Apple clearly has comparable hardware, software and a superior ecosystem. But I think it’s more than that. I also think that Apple has an inherent and unique (competitor proof) advantage in integration.

    – While Google and Microsoft are trying to build better operating systems, Apple is trying to build an operating system that works well with their hardware and within their ecosystem.

    – While Samsung, Motorola and Dell are trying to build better hardware, Apple is trying to build hardware that works well with their operating system and within their ecosystem.

    – While Google and Microsoft are trying to add or improve the various components of their ecosystem, Apple is trying to build an integrated whole. While Google and Microsoft focus on the individual trees, Apple focuses on the forest.

    I agree with you that Android is a weak touch computing ecosystem. And Google doesn’t seem to have the will or the culture or even the incentive necessary to fix it.

    Microsoft is a different case. They have the resources, the interest and the will. But as good as they make their components, they never seems to make their components work as well together as Apple does. And since their licensing model uses others to make their hardware, they have no hope of creating a fully integrated product.

    Microsoft can catch Apple if Apple stumbles. But so long as Apple is on their game, Apple has an inherent advantage that Microsoft – even at its best – cannot overcome.

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