Google seeks to challenge the iPad's dominance
Can the search giant slay the tablet giant?
According to the Wall Street Journal, the search engine giant plans to "sell co-branded tablets directly to consumers through an online store." Google, whose Nexus One was a flop, is eager to jumpstart sales of tablets powered by its Android operating system. Its easy to understand why. The iPad's market share stands at a whopping 73% -- and no Android tablet currently has more than 5% share, according to Forrester Research.
But the reason for this discrepancy is simple: The iPad is a superior product.
"Still, Apple, long known in the computer market for charging more than competitors, has managed to offer more than the other tablet brands for a lower price. . . . Other tablets of a similar size that use Google's Android operating system require a costly long-term data contract, or cost more than the iPad 2 without one, or lack 3G data capability altogether and can connect to the Internet only via Wi-Fi, such as through a home router," the consumer magazine said in May 2011.
Of course, Android tablets have improved since then, but unfortunately for Google, so has the iPad. Apple recently released the iPad "3" to rave reviews. Walt Mossberg, the Wall Street Journal's influential technology reviewer, said the device "has the most spectacular display I have ever seen in a mobile device." It's little wonder that Apple has already sold more than 3 million of the new iPads.
For shareholders, the stakes are huge. Google shares have barely budged this year as Wall Street wondered when the company would see a payoff from Android, which it gives away for free. Meanwhile, Apple, whose mobile operating system is proprietary, has seen its stock rise about 50% during the same time.
Google already is making a huge bet on Android through its planned $12.5 billion acquisition of Motorola Mobility (MMI). The Journal notes that Google will offer Motorola-branded tablets through its online store. That may not be a good thing. Last year, the company unveiled the Xoom tablet with much fanfare. The Xoom, though, was considered by pundits to be a bust, as were the two versions of the Dell (Dell) Streak.
Forming a marketing alliance to sell Android tablets is easy. Google's challenge, though, will be to convince the public that Android tablets are as cool and easy-to-use as an iPad.
Jonathan Berr is an Apple customer but, alas, does not own its shares or the shares of any other company mentioned here.
Products win or loose because of superior marketing strategies: incorporating the target market, product features, quality, and price and the market positioning, distribution network and supporting ecosystem.
The tablet market is still in the early adoption phase (where smart phones were a couple of years back.) Apple's pricing, positioning, and quality (along with its early entry) give it an edge in this market phase. Its pricing, positioning and quality will become a hinderance as the market matures - this is why it eventually lost on the desktop and it is loosing (share) on the phone.
Long Apple, Long Google
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It's time for a reality check in advance of the Chinese e-commerce giant's much anticipated initial public offering.
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