Battle of the Tablets: The next great tech war? Part 2

Tuesday, 25 October 2011 02:08

Written by Resti Reyes. Jr.

When HP launched the TouchPad, analysts were excited because HP is the world’s biggest supplier of PC’s. They had heft, they had clout, and they had just acquired a proprietary OS from Palm (for which they forked over US$1.2 billion). But that excitement was short-lived. Even their expensive launch TV commercial fell short of expectations as it got pulled before it could get enough exposures to make an impression. Motorola hurriedly launched their Xoom tablet – one of the first to use the then state-of-the-art OS, the Android Honeycomb. It was a good match for the iPad and actually created quite a stir in the US, but is a bit overpriced, and unfortunately, is not available on the Philippines.

Locally, Samsung has had an early success with its Galaxy Tab, particularly because it was available as a freebie when bundled with a two-year data plan from Smart. But an even stronger contender would be the sequel, the Galaxy Tab II, with its 10-inch screen (vs. the 7-inch screen of the first Galaxy Tab), and weighing in at a mere one pound (lighter than the iPad), it is deemed a very good challenge to Apple’s category-leading iPad. For the more demanding techie, Asus offers its Transformers model – a tablet that becomes a regular notebook PC when attached to a keyboard that becomes the bottom half of the traditional clamshell design.

But the biggest battle is still looming on the horizon. It starts November 15 – when Amazon launches the Kindle Fire.

First, a little backgrounder: Amazon started out as an online retailer of books. In time it expanded to include a variety of products, from music and video to electronics and sporting goods. All these products were physically shipped using couriers all over the world. Then, as broader bandwidths and high-speed Internet connection became more prevalent, Amazon began to shift to online delivery of some of its content. Of course, it became clear to them that Apple had a huge lead in music delivery through its iTunes application and turned its attention to the online delivery of books. It needed an electronic book reader and developed a simple black and white screen perfect for reading in a variety of light situations. It was small and light just like a paperback and was priced around $100. The e-reader was born and they called it the Kindle, and it was an immediate success (at least in the US). A competitor, Barnes & Noble soon introduced their version, called the Nook, and it too, was a hit, but not as much as the Kindle.

The Kindle had the advantage offered by Amazon’s huge online inventory of titles estimated at over 700,000. Book downloads was quick and easy and could be done through any reasonable wi-fi connection. The clash between Amazon and Apple was inevitable when Apple announced that iTunes would also go into the online book business, delivering books to all its devices including the Mac, iPhone, iPad and iPod Touch. This opened up a new front in the ongoing war: apart from OS and hardware, there is now a battle over content.

The Kindle Fire will be a jazzed-up full color version of the original black-and-white, non-backlit Kindle, but still keeping to the seven-inch screen size. It will let you check email, surf the web, play games, and download those all important apps (like Angry Birds), buy books and music, and watch videos, movies and TV shows. In other words, the e-reader grows up and becomes… ta-dah! … a media tablet.

The single biggest factor in its favor will be the price. At $199 US, it is 60% ($300) cheaper than the $499 iPad. This huge advantage cannot be underestimated – especially in the developing countries like the Philippines. Analysts are saying Amazon is actually taking a loss on the hardware price but hopes to make it up by hooking consumers to its massive inventory of content – music, books, video and software. When deconstructed, the manufacturing cost of the Kindle Fire came to around US$210. That’s $11 higher than the suggested retail price. There are of course even cheaper options here in the Philippines, like the China-made aPad, which retails at a mere P3,000, but these will never enjoy the kind of brand loyalty commanded by the better known brands, in spite of the price differences.

The Kindle Fire is smaller than the iPad at seven inches compared to Apple’s 10. It’s a size that fits nicely in your hand, similar to the RIM Blackberry Playbook. On the downside, it can only connect to the Internet with wi-fi, not cellular, as it has no SIM card. It has no camera and no microphone. There is no way to turn up the volume without going into the menu. It will use Google’s Android operating system which, so far looks like it is the only true competitor to Apple’s iOS system. It will have only 8GB of online storage and 512 MB of RAM but Amazon is quick to point to "the cloud," offering customers free online back-up of their data on Amazon’s servers.

Will the Kindle Fire burn a hole in the iPad? It stands a good chance based on the price alone. There’s already some talk about a second more powerful version in the works, perhaps one with the same bells and whistles as the iPad. And if Amazon can keep its irresistible price advantage, it can only mean one thing: the next great technology war is on.

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