The fact is that Apple and Google had a five year agreement, not entirely unlike the one Apple shared with Microsoft from 1997-2002, where steady updates of Office to the struggling Mac platform were promised. People worried that Apple would suffer with the prospect of Microsoft letting Office die on the vine at the end of that term, but the reality is that both companies continued to create and update products that fill that productivity need, and users today have great choices with Office 2011 and iWork.
Predicting the release of Apple’s medium-sized iPad has been the national pastime for the tech press this year. I would argue that it may be a very long wait.
Practically no one who follows Apple announcements expected the “iPad mini” to be announced alongside the iPhone 5. The conventional wisdom was that Apple would shine the spotlight on the iPhone for several weeks to guarantee a huge rollout, and then schedule another event in October to unleash the not-too-small, not-too-big iPad.
But then Apple announced the new iPod touch.
The latest generation touch now has the same larger screen (vertically speaking) as the iPhone 5, along with a host of other significant changes. And it’s priced at $299.
Which begs the question: what would they charge for the iPad mini?
Pundits predicted that Apple will price the still mythical device in the $200-$250 range, which is well below that of the new touch. I suppose the iPad mini could be built with cheaper components than the new iPod- a non-Retina screen, slower processor, lesser storage capacity, lousier cameras- all to drive it down to the price of something like the Kindle Fire.
This is a problem for two reasons:
1) Apple would suddenly be undercutting a new high-margin product with something slightly larger, cheaper, and slower.
2) Apple is not in the business of selling crap.
Let’s address the second point first. The battle cry for the small-ish iPad reminds me of a time in the distant past (3 years or so) when pundits declared that Apple would face certain peril if they didn’t create a super-cheap laptop to compete with the surging netbook market. Back then there was a range of $200 laptops available at your local Best Buy that ran Windows or Linux on cramped screens and were powered by yesterday’s technology. Profit margins on these devices were razor thin, and Apple just doesn’t duke it out for scraps at the bottom of the market.
So how much profit would Apple make on a $200 iPad mini? Not enough. Amazon is willing to go there with the Kindle Fire, but Amazon doesn’t mind barely operating in the black.
So, what if Apple decides to charge more than the iPod touch’s $299 price tag for the iPad mini? It would avoid the undercutting I mentioned earlier, and it would sit neatly between the price points of the touch and the the $499 iPad. That makes even less sense. Why? Because the iPad 2 parked in that slot at $399, and some believe it’s Apple’s best selling tablet.
Any way you slice it, there’s little if any room for a device like the iPad mini to slide into the current lineup.
The Verge reports:
Amazon’s new lineup of tablets don’t just differ from the original Kindle Fire in their hardware. Like last year’s cheapest Kindle e-reader, all three new models — that’s the Fire, the HD 7, and the HD 8.9 — will display Amazon’s “Special Offers” promotions and advertisements on their lock screens. Unlike the low-end Kindle, however, Amazon isn’t offering the devices in more expensive, ad-free models, nor is it making mention of any way to opt out for a fee.
Those aggressively low Kindle Fire prices are making more sense. There’s no doubt that Amazon’s profit margins on tablets are slimmer than Apple’s, but by subsidizing them with ads it shows that Amazon is no longer willing to give them away at cost.
How do you know someone’s the market leader? When this happens.
The steady stream of rumors that Apple has an “iPad mini” in the pipeline to compete with the Kindle Fire and newly announced Google Nexus 7 got a boost from The New York Times today:
The company is developing a new tablet with a 7.85-inch screen that is likely to sell for significantly less than the latest $499 iPad, with its 9.7-inch display, according to several people with knowledge of the project who declined to be named discussing confidential plans. The product is expected to be announced this year.
Natalie Kerris, an Apple spokeswoman, declined to comment.
What’s interesting about this seemingly inevitable release (although I’m still not convinced) is that it would mark Apple’s first post-Jobs decision that falls outside of his original vision for the tablet. Apple doesn’t have a history of grappling at the low end of the market (think $400 notebooks) because the margins are incredibly low, and jumping into such a market because of a perceived threat seems like a defensive and reactive move. It was only a few years ago that pundits were calling on Apple to get into the thriving netbook market or get left behind. To me this feels like Netbook 2.0.
Anyone following Apple and Microsoft in the late 90s would have a hard time imagining a headline like this in 2012. ExtremeTech’s Sebastian Anthony examines the upcoming strategies from each company later this year, and summarizes Microsoft’s situation like this:
The problem, of course, is that Windows 8 is a massive, revolutionary gamble that takes Microsoft way beyond its comfort zone. For 30 years, Microsoft has been making money on x86 PCs and servers, and the Office suite of software. With Windows 8, Microsoft is moving to a brand new architecture, giving away Office for free, doing away with the Start button and menu, and generally making a huge mess of the Desktop/Explorer side of things. Adding to this, Windows Phone 7 is limping along, and there’s no real indication that Windows drives users to the Xbox 360, and vice versa. In short, Microsoft needs Windows 8 to succeed on tablets and drive sales of Windows Phone 8… or it’s screwed.
I’m encouraged that Microsoft is striking out in a different direction with Metro and Windows 8, but I wonder if it’s enough. While Apple essentially created new markets for itself and folded that success back to the traditional desktop computer, Microsoft is trying to push the other way with a “Windows everywhere” strategy that is a variation on their old theme. The problem is that Windows Phone 7, while very good, hasn’t gained the traction needed to entice a large user base to “lock in” with the new experience across all devices.
The world began passing Microsoft by in 2007 when the iPhone hit, and the me-too mass market success of Android that followed further marginalized the former Redmond giant. Painted into a corner, Microsoft feels they need to respond boldly with Windows 8, a largely unproven break from their traditional computing approach. 2012 is shaping up to be a very interesting year.
or so says Mat Honan at Gizmodo:
But I didn’t switch for political reasons, or as an act of protest. I don’t care if Google hurts Twitter or Facebook—or even Friendster for that matter. Boo-hoo. I only care if it hurts me. And this does. Google broke itself.
For years, Google Search has been the highest quality web product I’ve ever used. It has remained consistently essential as an information-delivery mechanism. I typically hit it hundreds of times a day—on my phone, tablet, laptop and desktop. But with one update it wiped out all those years of loyalty and goodwill it had built up.
I’ve never really spent much time with Bing, but the changes to Google lately have left me less than pleased. I don’t need another social network, and Google’s desire to weave Google+ into the search results is intrusive and distracting. Honan’s argument to try Bing is compelling:
In short, it’s a lot like Google. Not the Google of today, but the Google you fell in love with, the one that put your search results above its financial ones. The Google that delivered.
Gregg Keizer, reporting for Computerworld:
After a one-month pause, Microsoft’s Internet Explorer (IE) resumed its usage share slide in December, dropping to a new low and setting the stage for a fall below 50% as early as March.
Google Chrome is leading the charge, set to overtake Firefox as the #2 browser, with Apple’s Safari stuck at 5%.
Tricia Duryee for AllThingsD:
In a new report, Flurry Analytics estimates that in the final seven days of 2011, 1.2 billion apps were downloaded worldwide across both Android and iOS, representing a 60 percent jump over a typical week.
It’s an interesting number, but it’s worth noting that Flurry Analytics gets its numbers from apps that use its technology- which is currently below 20% of the combined iOS and Android marketplaces.
David Talley from The Motley Fool has a mostly positive outlook for Microsoft in 2012:
Remember Microsoft (NASDAQ: MSFT), that great growth company that created enormous wealth for its shareholders in the 90′s? Remember the innovations that came from that company? Fortunately for you (because it creates an investing opportunity), most people have forgotten that Microsoft, instead focusing on a company that has struggled to innovate and whose stock price has reflected that fact. However, there is much to get excited about for Microsoft.
I suppose the “innovations” Talley is referring to include Windows 95 and Internet Explorer, but his point about crazy profits and value to the shareholder is valid. I agree that Microsoft’s stock price has been in the dumps for the last decade, despite the fact that they still rake in piles of cash with Windows and Office. The real action and growth potential is in the mobile market, so their deal to partner with Nokia could be seen as a brilliant move to inject Windows Phone into a market pretty much locked up by Apple and Google.