Since my last post, lots has happened that gives me hope that change is on the way. iPad still enjoys a virtual monopoly on tablet sized devices. But that does not appear to be the case for much longer.
Many companies seemed to have been hitching their wagons to Microsoft's Windows 7 tablet, which CEO Steve Ballmer says is "coming soon". However, I don't think we will see them any time this year. MS seems to want to rely on a new Intel chip that is not due out until 2011. If MS really does plan to shove a tablet out the door this this year, they may rely on exiting Atom Chips for a while, then change course when the new chip arrives next year. This means all you early adopters can expect a buggy beta like version of the device with much poorer battery live and bulkier size than you will get next year.
Also, MS seems to be trying to base its tablet OS on the PC version of Windows. That is a big mistake. It will mean the device is slow, crash-prone, and a hardware hog. MS still just doesn't get it. The latest user interface (UI) called Macallan seems more focused on cool graphics rather than making a useful and efficient device. Its focus on turning pages looking like you are turning a paper page in a magazine reminds me of how some car manufacturers used to put fake wood panels on the sides of their cars so they would appear more like the wooden horse drawn wagons used by their parents. It also reminds me of Xbox's focus on graphics rather than fun game play, which caused the Nintendo Wii push MS aside in the console market.
It appears, however, that most of the major would-be tablet makers agree with this assessment and are dumping MS as the primary provider of their OS. HP made, in my opinion, a brilliant move by picking up Palm at a bargain basement price a few months ago. HP dumped plans to develop a Windows 7 tablet and is now allegedly building one based on Palm's WebOS. This will not only mean a better product that can be brought to market faster, but they won't even have to pay OS royalties to MS or anyone else. Now we just have to see if they can execute this plan properly. HP is still talking about an enterprise version with Windows, but I expect that will be dropped soon, or shortly after it is release as a failure similar to the horrible MS Kin.
Also, expect to see Blackberry entering the arena with its upcoming release of Blackpad supposedly this fall. Again, this is essentially the OS we see on Blackberry phones on a device with a much larger screen. I use a Blackberry every day and love what it can do. My biggest complaint with it right now is that I would often like a bigger screen. I think I am the perfect target market for this device. Unlike the iPad, which is marketed more to students. Blackpad will try to accommodate the business market (the people with all the money). Businessmen who mostly want to use this gadget as a toy will feel more comfortable seeking an employer request to order something from Blackberry than iPad or a consumer oriented book reader. If it can handle connecting to enterprise servers and can make phone calls using a bluetooth headset, I think most IT departments will be happy to support these devices as legitimate business tools.
Dell and Asus have also dropped plans for a Windows OS and are going with Android. Again, like Apple has done, HP is doing with Palm and Blackberry is doing with Blackpad, they are essentially taking a smartphone OS and putting it on a bigger screen. This is exactly the way to go. But again, execution is everything. We have to wait for the releases. Expect to see lots of pressure for fall releases in time for Christmas. Also, with all the companies entering the arena, expect to see a price war next year. By Christmas 2011, these devices will probably be selling in the $250 - $300 range for base models.
On the eReader side of things, we see Amazon finally cutting its prices, with the new release of a $139 model reader ($189 with free 3G wireless). For me, the 6" screen is still a little small for most purposes. I expect this price to drop under $100 by next year. Amazon will sell these things as a loss leader, hoping to make money on all the ebooks you buy. Since they make it difficult to load much of anything else on the device, the devices should be sold at a loss, just like printer companies sell printers at a loss, knowing they make their money on the cartridges.
Amazon had to move much lower than the iPad prices, but also has to worry about competition from the Nook, from Barnes & Noble. The Nook starts at $149 for a similar black & white 6" screen. It also has this tiny color touch screen below the main screen. But I find this a distraction. They would be better off just putting buttons there. The fact that Amazon dropped prices $10 below the Nook says they are not going to let direct competition undercut them. Prepare for more price wars in the coming months.
Other readers such as the Kobo and Sony Reader are pressured to price in this same area. But since they are not as well positioned to make up losses after the initial sale, keeping up with an increasing price war may be more difficult for them. As I said before, dedicated eReaders using eInk are easier on the eyes if reading a long time, but most people will still prefer a multi-function tablet unless the eReader can live in a much lower price point.