Apple’s competitive advantages for the iPad/tablet computer

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    Posted: 28 April 2010 04:24 PM #16

    Would Facebook influence the success of a mobile platform?

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    Posted: 28 April 2010 04:38 PM #17

    Just to keep everyone up to date, here are my notes as of this evening. I’m assuming there will be a huge market (my vague guestimate is for 40-50 million units/year within a few years) for the kind of tablet computer that is the iPad and that many manufacturers are going to jump in with an Android driven device. I’ll start writing tomorrow.

    Given the above premises:

    iPhone OS v Android

    Apple +
    1) Corporate focus on product execution will yield high end user satisfaction

    2) platform integration (itunes, macs, app store, etc)

    3) Ease of use through consistency and simplicity (superiour user experience)

    4) Wow factor

    5) bleed over from iPhone/iPod Touch

    6) economies of scale resulting in better margins or cheaper prices: even if Apple only controls 40% of the eventually stable tablet market the 60% of the market will be split among HP, Dell, Lenovo, HTC, Sony, Samsung, LG and the many other smaller brands who will enter tablet products onto the market either globally or regionally. Arguably none will have more than 15% market share.

    This gives Apple quite an advantage for economies of scale and apple has learned to watch its supply chains very carefully.

    7) product focus again, even if Apple only controls 40% of the tablet market eventually stable tablet market the 60% of the market will be split among HP, Dell, Lenovo, HTC, Sony, Toshiba, Samsung, LG and the many other smaller brands who will enter products onto the market. Arguably none will have more than 15% market share.

    There will be a great temptation to offer “custom” features to differentiate their tablet from the other Android driven tablets. This will lead to all sorts of complications for platform developers. With Apple, if you follow the spirit of the SDK and Apple rules you are safe and your software will run on all instances of the OS. This is significant in the battle for developers.

    8) Likely to remain the more polished and refined OS because of Apple traditional strengths in end user experience refinements and Google’s minimal enthusiasm for design as Apple practices it.

    9) Apple will work hard to entice the most talented developers with monetisation strategies starting with iAd revenue sharing which can monetise free apps with a compelling offer. While there is vocal disquiet about how Apple run the App store and the opacity of the process that approves apps, the totally disgruntled who say never again are really only a very small minority of the iPad developer community and with Apple supplying such an easy and straight forward on-ramp to market at reasonable rates with solid payback, it’s a highly attractive offer for many.

    10) Powerful PR strategies and strong first to market advantage in a global range of markets (22) and immediately powerful and rapidly growing product ecosystem already on a global scale.

    11) Custom chip design in house yields better customer value either through value or performance as Apple decides

    12) That big data centre in North Carolina is now hiring staff and has to be for something. Look for more iTunes/MobileMe integration and expansion with new cloud functionality of some sort.

    Android Market +
    1) Frequent product refresh rate and multiple competing manufacturers takes advantage of latest technology and newest features and niche market specialisation. Compare this to Apple’s usual once a year updates

    2) Free OS to manufacturers who can customise Android as they wish and potentially start their own bespoke app stores. While this complicates App development on Android, there’s an incentive for the tablet developers to maximise their revenue from a products short lifetime in the Android market.  Also as its free and more customisable compared to Windows Mobile 7 from the manufacturers point of view this is also a competitive advantage against win mobile7

    3) More price points and more affordable price points and uber luxus and techy price points as well and everything in between.

    4) They will capture the Anyone-but-Apple geek leaning subgroup almost completely while trad Msofties will go win mobile 7.

    5) They will offer the largest theoretical market to developers but fragmentation and specialisation will limit that a certain extent

    6) Flash

    7) Tight integration with Google Apps/Gmail and other Google services a compelling offer for Google desktop app fans of which there are many. Of course Win 7 fans will find Msoft the best offer because of their phone integration with msoft services

    8) The latest Google technologies tightly integrated into the OS before they even think about sharing them out with others eg: google voice, google spoken map directions, built in Google buzz and that sort of thing.


    It will be interesting to see how both companies react to the consequences of the different screen sizes and the resulting pressure to differentiate the OS’s for the tablet from the phone os. As additional memory and fast processors become available the tablet will take on more and more functionality of a laptop.

    [ Edited: 28 April 2010 04:43 PM by relentlessFocus ]

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    Posted: 29 April 2010 11:42 AM #18

    One additional advantage i pad:
    Steven Paul Jobs

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    Posted: 09 May 2010 09:18 AM #19

    Part 1 of my article is now up

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    news, backstory, analysis and opinion for investors in AAPL at my blog relentless focus