ogami_ito said:
I'm assuming that Apple's strategy will continue to be to charge a large premium for the hardware, while Android tablets will be commodities, which means Android tablets will be much more prevalent and cheaper. If it had a regular premium like a notebook computer, iPad would sell unsubsidized retail for around $400 (assuming $280 cost, 20% profit, and 15%/15% disty/retail split...and that is a very generous assumption). On Taobao in China, iPad 8Mb are selling at 3500RMB+, while the Archos tablet...which has capacity 10inch screen and much less favorable economies of scale...sells for around 2500RMB. Right now, the Android tablets on the USA market are pricing at premium because their manufacturers think they can get away with that. Maybe Apple will go for a low-end mass-acceptance strategy in the future though.
That wasn't what they did with the iPod - once MP3 players became commodity items they were priced fairly aggressively. And in the US market at least, iPhones are priced pretty similarly to comparable Android phones. The long-term value to Apple of establishing iOS as the leading tablet platform is enormous.
You're also forgetting the nature of consumer electronics distribution in the US; Apple doesn't have to compete with Taobao's prices, they don't even really have to worry too much about the crappy $189 thing that Wal-Mart's selling on Black Friday, they just need to make sure the iPad is as cheap as whatever Android tablet Best Buy is pushing and they'll hold on to the interesting part of the market quite well.
ogami_ito said:
I don't believe that Apple's contracts makes things difficult for other manufactures. I believe that Apple's supplier contracts are actually a negative factor; its tied them up with the likes of Foxconn and Wintek (the bastards that poisoned workers in Suzhou where I live), while their competitors either have their own on-the-ground facilities in China (Samsung, Moto, HTC), or have more flexible OEM strategies. But this is neither here nor there.
Right, because the electronics industry is just a model of worker rights and eco-friendliness outside of Apple... Foxconn and Wintek aren't the subject of those giant long-term contracts anyway, component makers like Samsung are; Apple can have their billions of dollars of flash memory shipped to whichever manufacturing partner they feel like.
ogami_ito said:
This is the more interesting issue. In my opinion, the iPad is less suitable for education and ultimately has less potential because the nature of iOS. Its tied to iTunes. Which means its tied to a desktop computer. In the GLOBALmarket, the ideal device is cheap and would be PC - independent. A commodity. And in the commodity market, there is a place for low end up to high-end.
That's not going to last - what do you think that multi-billion-dollar data center in North Carolina is for? I'd wager at least even money that iOS 5 introduces PC-free operation for the iPad, and possibly the iPhone too.
ogami_ito said:
Yes. The problem with Android now is lack of quality software. But schools would buy no-name tablets. They buy them from value added resellers (VARs), which would supply after-sales service, as well as things like custom remote administration solutions, or custom education administration software...side-loaded onto the devices. And actually, all the 1st through 3rd tier PC brands will also offer tablets, and they will have service centers for USA. Many of those branded-computers will be low-end completely OEMed models from the no-name manufacturers. I *believe* the Archos tablets are made this way today.
But those PC manufacturers are going to want some kind of a cut... I just don't see they being able to significantly undercut Apple. Remember too that fragmentation, even at the level of commodity PC hardware, brings additional support costs - it's much easier to train your support staff to deal with two models of tablet than 15.
ogami_ito said:
On a personal note, I would not have much of a problem buying a $150 Android resistive-screen tablet for my small children which they don't need to plug into my desktop. They can now access the Google Market from a web-browser. And in the future, they can access my parental-approved market, like a Nickolodian Market...or a University of California: Chinese Studies Department market....from the device.
A resistive-screen Android tablet? That's the sort of thing that gives app developers nightmares - we're already juggling enough fragmentation questions without having to deal with more than one touchscreen technology.
westmeadboy said:
Sorry Mike, but that sounds like FUD. Simply linking to a website with a premium version - come on!
Both PalmGear and Handango forbade that, back in the day - we never sold on Handango, but we actually had to have a separate version of Pleco on PalmGear that listed their URL in the About box instead of our own; weren't allowed to mention pleco.com anywhere in the app. (and yes, they did check this and banned a number of apps that violated their rules) The theoretical justification is that if the market is responsible for introducing people to your app they're entitled to a share of whatever you make from selling it, much like an affiliate program I suppose. Google's moving in this direction and I see no reason to assume they won't eventually introduce a similar policy.
westmeadboy said:
You're confusing the platform with the Android Market. They are two different things. It's just that one sits on top of the other, which is open. The fact is you can download the platform and do whatever you like with it. That's why it's called open. The Android Market is not open and is not called open.
The fact is, you have options here. Options you don't have at all on iOS. I'd imagine that more than 90% of Android devices allow bypassing of any pre-installed market app (without the need to root/jailbreak). That's about 90%+ higher than iOS.
In the US I suspect the percentage is a lot lower thanks to the pervasive influence of AT&T. And may get even lower once Amazon introduces an Android-based Kindle which only runs apps from their store. And anyway, if you did a survey I suspect that at least half of the (already limited subset of) Android users who've actually downloaded apps are unaware that it's possible to install them outside of Android Market.
westmeadboy said:
About the in-app purchases being 30%: They never said it would be anything else and I remember you saying you thought they might end up charging that. So what's the problem?
They weren't enforcing it - you pointed out yourself that lots of other developers were able to sell add-ons in app without any problems from Google. App stores are essentially common-law legal systems - the interpretation of the rules is as important as the rules themselves; I'm not saying Apple's blameless in this - far from it - but I view Google starting to ban apps that sell add-ons outside of the Market as entirely equivalent to Apple starting to ban apps that offer paid content without the option to purchase it through Apple's system; in both cases they're simply enforcing pre-existing rules, but in both cases the situation for developers is changing dramatically as a result of that new interpretation.
gato said:
Interesting. In any case, I don't think too many public schools in the US will be buying tablets any time soon. They don't even have enough money to pay for teachers.
True that - a high-school principal I know did an iPad trial recently and concluded they didn't do nearly enough to justify their cost, and this was at an incredibly wealthy private school for which equipping every student with an iPad would amount to barely more than a rounding error in their annual budget. The whole PC-in-every-classroom thing in the '90s is almost universally agreed to have been a huge expensive blunder, and I don't imagine they're eager to repeat that mistake...
There's also still the question of why schools should buy every student a tablet instead of a low-end laptop when the costs are likely to remain pretty comparable (especially when you factor in lifetime setup / support costs); tablets are still content-consumption devices, you can't really do your homework on them or even take class notes. If anything I'd say that Chrome OS is a better bet to penetrate schools than Android, in fact... there's an awful lot to be said for giving every student a $200 netbook with a web browser, especially at schools where the students don't have much money.