Tuesday, 18 October 2011

Mobile Opportunity: Amazon vs. Apple? No, it's Amazon and Apple vs. Everyone Else

Update: Latest returns on the lack of success with the latest Kindle designs raises questions about the soundness of Michael Mace's analysis to begin with.  Not only is the conclusion that Amazon is cutting off Android now in doubt, but the very idea that Amazon has a sustainable tablet business.

Michael Mace has a very strong analysis of Apple vs. Amazon on the tablet market. He makes a strong case that the real fight on the tabled war is between Amazon's cheap Kindle and iPad.

"In the tablet market right now we have the privilege of watching two companies do great strategy, Apple and Amazon. The press wants to label the Kindle Fire an iPad killer, but really it's the first sensible iPad counterpoint, a tablet device with its own unique design center and business model. I don't think either one's going to kill the other, but I think together they're likely to chop up almost every other company that gets in their way. In particular, that means Microsoft, RIM, and Google."
Mobile Opportunity: Amazon vs. Apple? No, it's Amazon and Apple vs. Everyone Else

Now actually we could not disagree more with the conclusion that Google and Microsoft are dead in the water. A few years ago Android was a marginal player in the smart phone market and Apple dominated it. Now Android is taking the lion share of the market.

Its not clear why one should assume that the expensive Apple iPad is somehow going to avoid the fate of the expensive Apple iPhone before it. The more reasonable analysis is that Android tablets will also take this space in the future.

Also thinking back to the 1990s we have been here before. In 1989 the Mac was hands down the best consumer PC for most users needs. There was a wide field of firms but Apple lead the way. Microsoft built a platform that allowed people to buy cheaper devices and Microsoft drove Apple to the point of collapse. Google has managed to pull the same trick against the iPhone.

So where precisely the logic in thinking Apple has won for all times with the iPad, or that Samsung, HTC, and Sony are just going to lie down and die?

Don't bet on it. We see Android as the future tablet platform and potentially even Microsoft. Apple products are simply too expensive to hold global dominance. For people who want an iPad they option is not to get an Amazon, but an Android.

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