By Greg Mills
With a virtual monopoly on slate computers running a modern touch screen operating system, Apple has lapped the competition; with the release of the iPad 2, Apple will likely hold that commanding market share for some time to come. A one-year lead in high tech is unprecedented for a killer electronic product category.
The problem competing slate computers have is that Apple has more or less bought up the world supply of touch screens in the resolutions and sizes they want. Then, until recently, Apple’s in-house A4 chip set was hard to match. Intel, a year later, has finally come up with silicon to do the trick. Since Microsoft completely dropped the ball on continuing the Windows/Intel business model for the slate computer and mobile markets that made the PC market work all these years, Google has revamped their Android OS for smart phones to accommodate modern slate computers.
Motorola, wanting to stem the flow of red ink in their declining market share for dumb phones and poorly received smart phones, has attempted to create the “iPad killer” the PC world has been clamoring for.
Unfortunately for Motorola, the combination of parts required to even come close to matching the iPad results in costs that hem them in enough that they can’t match the price points Apple has made popular. According to a Best Buy listing, Motorola is launching the Zoom at an US$799 price point. When Apple launched the iPad 1 at $499m the air was sucked out of the room. After atmospheric pressure was restored reporters hastily took back their predictions of iPad costing $1,000.
The effect of setting such a low price created the feeling that iPad was a bargain — and it is. You get all the functions related to consuming digital content for half the cost of a regular laptop. While competitive slate computers are sporting front and back cameras, that advantage will last a matter of a few days or weeks before iPad 2 is announced. The coming iPad is also sporting a dual core chip and who-knows-what other killer features still under wraps.
While normally Apple announces products that are ready to ship, sometimes they announce products a bit ahead of time due to pending leaks they can’t control, such as government filings that are public information or compelling marketing reasons. Once a new release of an existing product goes out, sales of the prior version of the product begin to tail off, so timing is everything in clearing market channels of old products.
The leaked info that Apple is planning a “little event” soon to announce iPad 2 is circulating the news. The timing couldn’t be worse for Motorola. Matching the year-old iPad 1 was enough of a problem; not matching Apple’s price point is going to hurt and the iPad 2 being announced right away would be the final straw. The wind has been taken out of Motorola’s sails before Zoom is even launched. Rumors of new Apple products are enough to drastically influence the market.
Also waiting in the wings is the legal action Apple has initiated regarding patent infringement of Android touch screen technology. That technology is also fundamental to the new Honeycomb tablet OS. If Apple could paper the walls of the bathrooms at the Cupertino campus buildings with iPhone patents, you can be darn sure they also have plenty of fresh patents in the works for the iPad.
I expect the legal juggernaut Apple has initiated against all Android handset makers to draw blood this year. With the pirated apps problem, app marketing disorganization and open source issues Android is facing, this will not be a good year for that platform. Even the handset makers are hedging their bet on the Android by launching handsets that support the Microsoft OS. That makes Microsoft’s touch scene OS the third choice. Just about right I guess. Expect Apple to serve Microsoft a Federal Lawsuit over touch screen technology used in Windows Mobile 7 any time now. It is a very good year at Apple.
That’s Greg’s bite for today.
(Greg Mills is currently a Faux Artist in Kansas City. Formerly a new product R&D man for the paint sundry market, he holds 11 US patents. He’s working on a solar energy startup using a patent pending process of turning waste dual pane glass into thermal solar panels used to heat water. Married, with one daughter still at home, Greg writes for intellectual web sites and Mac related issues. See Greg’s web sites at http://www.gregmills.info . He can be emailed at gregmills.mac.)