Kill Them All!

Apple and Amazon will rule the tablet space absolutely. All the other tablet vendors are so f*cked…

The newly established price point of $199 will squeeze out everybody who doesn’t have a major market advantage. Apple have their phenomenal marketing — the only reason people pay $499+ for an iPad is because of cachet. Nobody else can generate this kind of cachet — not Sony, not HP, not Samsung, not Motorola, not Toshiba.

Amazon (and Apple) have their ecosystem. Amazon is subsidizing the Kindle Fire with anticipated future sales of content, ie, books, music, movies, apps. It’s the Gillette model of selling razor blades (or the printer model of selling inkjet cartridges, or the cellphone model of selling voice/data plans). (Apple don’t have to subsidize anything because they have the power of cachet.)

The other vendors are so f*cked. They can’t compete on price. If they try to sell their larger tablets at, say, $299, they will lose money without any kind of compensation. And who’s going to spend $400-500 on a non-iPad tablet?? WHY would they spend $400-500 on a non-iPad tablet? Just for the rear-facing camera that people seldom use? Just for 16-32GB of storage, at a time when everything is moving into the cloud?

They might be able to sell on the basis of 3G/4G, but the reality is, most people don’t want to spend extra on a data plan. The big money is in Wi-Fi-only models.

The only vendor who might come out of this alive is Sony — they also have an ecosystem of sorts that they can build on, if they have the wherewithal.

Amazon have turned out to be the Spartacus of the tablet universe. Jeff Bezos said, “Kill them all!” And he’s doing just that.