Tuesday, April 14, 2009

More thoughts on the Apple Tablet

Forget for a moment that the Apple Tablet is unlikely to be released. If all the rumors are true, what is the implied "lay of the land", and what product is expected to arrive?

Apple has said OS 10.6 will be a maintenance release of sorts. Unlike past feature-oriented releases, Snow Leopard should be viewed as the fortification of past advances, and the improvement of the infrastructure gluing those features together. The most radical change rumored is a UI revision called Marble, implying Apple views Aqua as infrastructure worth upgrading, instead of a stable end feature in itself.

A tablet release implies Apple has created an OS X variant that bridges the gap between the Mac and iPhone for users, and targets a unique hardware set. No tablet buyer would accept the access and sync limitations of the iPhone. File system manipulation is a must, as is a proper PIM, from Apple or a 3rd party. To provide this, the OS X Tablet would have to blend the interfaces of both Mac and iPhone, too. After the monumental work involved, this variant would have to be coded to run on a new processor, or, at least, a very different set of chips than any other Apple.

It seems unlikely that Apple could create an OS X Tablet variant while doing the work of Snow Leopard. Making a new OS X that also incorporates the work of 10.6 would mean rebuilding a jet while it flies, without blueprints for the new jet, or a fixed destination. If Apple pulled it off, then they accomplished something truly stupendous.

The Apple Tablet has also been rumored to be like a 7in or 10in iPhone.

If the tablet is very Mac-like, even 10in of screen would be a challenge to enjoy. No Mac ships with less than a 13in screen, and Jobs and Apple have been resistant to anything smaller. (The 12in PowerBook was never replaced, despite being quite popular.) Customer expectations, driven by scrupulous Apple brand management, mean a Mac must do certain things. For example, there has been strenuous advertising of HD content consumption and creation on Macs, and the rumored size of the Tablet precludes it from participating in either. No consumer Mac will be a go-to Final Cut Pro box, but a PC isn't a Mac if it can't make iMovies.

If the tablet is more like an iPhone, it will face more daunting challenges. Changing screen size and resolution means breaking or distorting all current iPhone apps. A clever trick would be to double the current screen exactly, and split apps into HD and SD versions. The latter would be upsampled iPhone apps, with the former providing sharper UI on the tablet and greater functionality. Such a solution still fragments the App Store market, and isn't too great a way to showcase what will be a massive amount of un-optimized application content.

If a tablet of any kind is released, it would arrive at a price point few are honestly considering. With iPhones at $200, and plan-less iPod Touch models at $300-$400, any Tablet would have to start at least $500, and even that is a very low estimate. Apple cannot afford to make the iPod Touch a bad deal, nor can it introduce a telephony platform that cannibalizes the sales of AT&T plans. Pricing must go higher than the $400 of the top-end iPod Touch.

At the introduction of a radically new device, custom and cutting edge parts are ordered in small quantities, driving up even something as likely to sell in quantity as the iPhone, which was released at $600. Precedent points to a tablet that cannot cost less than $600, then, as rumors have it being as different from earlier hardware as the iPhone was the iPod. Surely the hardware and development costs necessitate an iPhone 1.0-or-greater retail MSRP.

At $600 to $800, the mythical Apple Tablet begins to match Mac Mini and educational iMac pricing, but would represent a discount from the MacBook. Shifting sales away from an established but critically growth-dependent Mac platform is risky. That each move from Mac to Tablet/OS X results in less revenue at a lower margin with fewer upsell opportunities, and then requires more intensive, educational customer support, is problematic. If the Tablet is hobbled
to prevent this dynamic, it will flounder around, an overpriced gimmick.

If the tablet is made to exceed $1000, it would have to accommodate very broad, Mac-alike usage, and be compelling enough to operate as a stand-alone computer. The cheap netbooks of the past year have proven that consumers are adaptable creatures, and willing to sacrifice and learn for the sake of a compelling enough new form factor. If Apple has a tablet so capable it matches a MacBook Air, fits into a much smaller space, and can be delivered for $2000, I would be surprised. If such a device output to just a 10in screen, it would be truly misconceived. Any larger, and the Tablet becomes as cumbersome as a laptop, but without the functionality of a keyboard or speakers, and packaged so as to make it uncomfortable to sit at or use for long periods of time.

Sadly, the Apple Tablet strikes me as unlikely. Even if the company had the development capacity to create a 10.6 "signed-content touch Mac" variant of OS X, and 10.6 at the same time, the pricing and packaging of any Tablet device cannot be made attractive. Either Apple is offering giant iPods at a small premium, or crippled, barely-profitable Macs. Even the miracle scenario of a 7in tablet with USB and video out, App Store compatibility, non-iTunes PDA-alike data management software, all for $600, results in a niche product.

The Apple of today isn't trying to cover every base with esoteric hardware offerings. A new platform that can't deliver millions of sales is not worth pursuing. The Apple TV competes in, broadly considered, the set top box market, a realm worth billions. Just having a "hobby" there drives hundreds of thousands of sales. Moreover, developing for the living room has the benefit of educating Apple and preparing it for the long-anticipated, platform-defining battle to deliver all television content.

In contrast, tablets have been available for a decade or more in various forms, but have never sold in significant quantities. Indeed, it is not possible to learn the market for tablets, because there has never really been one. Creating a market is something the Apple II and Mac did, and both suffered for doing so. Second-wave Jobs products, like the iPod and iPhone, find markets that are poorly served and then do better. Only accessories risk first-mover status, and the last to be so bold was probably the first Airport card/WAP combo.

If someone can specify a plausible tablet price point, and describe a marketplace of at least 1m total, eventual customers, it would go a long way towards convincing me this rumor isn't utter noise.

3 comments:

Constable Odo said...

The Apple tablet would be of much more use than the Kindle eReader by a longshot. If Amazon can sell millions of Kindles then Apple could easily sell twice as many. An Apple tablet/netdevice could be a perfect machine for older high-school and college students. $600 with student discount.

Ted Landry said...

my sense is we'll see a one page of a paperback book sized device.

and it will be called the "iBook" :)

hanum said...

really awesome gadget. Great innovation. I like it.