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Summary:

By 2016, one-third of the U.S. population will own a tablet, says Forrester. This figure — 112.5 million people — is an upward revision due to two names in the tablet market: Apple and Amazon. All other tablet makers should leave Android for Windows, says Forrester.

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By 2016, one-third of the U.S. population is expected to own a tablet, says Forrester Research in a report released on Tuesday. This figure — 112.5 million people — is an upward revision from Forrester’s original expectation of 82.1 million, due to two names in the tablet market: Apple and Amazon. All other tablet makers ought to leave Android for Windows 8, according to Forrester analyst, Sarah Rotman Epps.

That’s a bold statement from Epps and it builds upon my earlier Android tablet market commentary about Android’s ecosystem challenge. Yesterday I said:

Google needs to work hard — perhaps more than ever before — at its upcoming I/O event to convince developers that there’s a reason to create tablet applications for Android. Perhaps selling a $199 pure Google device can help with that, because up to now, the Android tablet freight train isn’t chugging down the tracks at the speed of the iPad Express.

Bear in mind I made these statements as someone who uses an Android tablet on a daily basis. I also have an iPad and an old HP TouchPad running webOS. For most of my basic tasks — browsing, email, occasional gaming or movie watching, and reading Kindle books — my 7-inch Android tablet is the device of choice, mostly because of its size. I prefer a smaller tablet to the iPad. But when it comes to the widest variety of apps, services and digital media content, I turn to the iPad, like many others do.

I’ve said this before, but it bears repeating: successful mobile devices excel in hardware, software and the supporting ecosystem. Apple is clearly demonstrating this formula in tablets priced at $499 and higher. Amazon, and Barnes & Noble, for that matter, are doing the same in the $199 to $249 price range. That leaves little room for the smartphone and computer makers that are trying to make headway in the tablet market. And Forrester’s data shows that after Apple and Amazon, companies may be fighting for scraps:

Few, if any, of these have an ecosystem that rivals Apple or Amazon. Rotts keys on this point, saying:

Forrester’s data shows that the top reason consumers don’t buy tablets isn’t because of price, or technology—it’s because they say “I don’t think I need it.” It’s about the services—what you can do with the device, which is why Apple, Amazon, and B&N have succeeded in the US where pure hardware plays have failed.

I can’t help but think back to the first HDTVs to hit the market. As always, I was an early adopter, buying my first 1080i set in 2001. But nobody else was, even though the sets were technical marvels compared to older TVs. Aside from the high price, why weren’t others following my lead? Simple. There was little to no content available, i.e., no ecosystem of media or services.

Samsung, Lenovo, Toshiba, HTC, Asus and others all have the know-how to build solid hardware, often at reasonable prices. For a device with such a high focus on consumption, however, a wider range of consumables increases demand. Each company has made valiant efforts at bringing in media partners or digital storefronts, but in the end, these are second-hand shops when compared to Apple and Amazon.

Android tablets from these manufacturers will still surely sell: I’ve bought two from Samsung, and I occasionally see Android tablets in the wild. An Android meets most of my needs and will satisfy the needs of others who don’t want a device tied to a particular ecosystem.

But the masses want more than a shiny piece of hardware: they want the widest variety of apps and media to choose from, and for many that will be an iPad, Kindle Fire or, to a lesser degree, a Nook Tablet: These three accounted for 78 percent of all tablets sold last quarter.

  1. patrickdlogan Tuesday, March 6, 2012

    Better to join an unproven Windows 8 ecosystem than an Android ecosystem that at least has its foot in the door and moving in a known direction? I’m not sure I am buying that argument at this point.

    1. After almost 5 years, the Android ecosystem still suffers from significant fragmentation issues. It feels very rough around the edges compared with the Apple experience and that makes me hesitant to invest my money in an Android device. I’m more confident in Microsoft to deliver an effective ecosystem than I am in the Android community to resolve the current issues. The reasoning is that Microsoft has a lot of experience with multi-vendor ecosystems, and I don’t see a lot of leadership coming from Google.

      My biggest concern with Microsoft is that their software and UI will perform poorly because it drags along too much Windows baggage, although early reviews seem positive.

    2. Microsoft has a a proven ecosystem. It’s been brewing for six years and tens of millions of households have access. It’s called Xbox Live. It already has a cover flow interface ;-)

  2. The problem with Android is that too much of its ecosystem, especially feature set and upgrades, is in the hands of cellphone providers. It will remain disjointed until and unless that changes. If Microsoft keeps control of its ecosystem, and leverages its vast Wintel customer base, it should surpass the non-Amazon Android market for tablets pretty quickly. Catching Amazon or Apple is likely out of reach, as the consumer market inherently dwarfs the corporate market Windows thrives in.

  3. Android(3.0+) on tablets has been a disaster. One thing google needs to understand is that gestures are in. Webos had them and taking hint ms rightfully now has win8 based on them. On touch based devices(without tactile feedback), gestures are natural; pressing a button is not; and relying heavily on screen buttons and having a persistent bar at all times to navigate was ok… untill win8 came out. MS has done the first bit right, and i’m sure a better ecosystem will take its place.

  4. Lucian Armasu Tuesday, March 6, 2012

    Windows 8 for ARM will have no ecosytem, Kevin, or it will certainly be smaller than Android’s ecosystem. As for the x86 version, that’s hardly an ecosystem for tablets.

    Windows has had 4 major problems in the tablet market, and why the tablets never took off:

    1) OS not optimized for touch
    2) Apps not optimized for touch
    3) Expensive hardware
    4) Low battery life

    Out of those 4, they’ve only fixed the first one – sort of. The OS does provide you with a touch drive interface now, but all of the apps are on the “un-optimized” for touch side of the OS. Also the apps themselves are still not optimized for touch either – the vast majority of them.

    The hardware problem – I predict a Windows 8 tablet with hardware similar with Android will be 50-100% more expensive. They’ll still be around $700-$800, which I suppose is much cheaper than the $2000 they used to cost in the past, but for that price you’ll be able to get a $400 tablet.

    The low battery life problem – whether they use Core i5 like in the demo tablet, or Atom chips, the battery life will still be significantly weaker than the ARM version. And Microsoft needs the ARM version to succeed in the tablet market. So we’re back to square one, where on ARM they won’t have any apps.

    I really think you’re overestimating how successful Windows 8 will be. Windows 8 is a worse experience for the desktop than Windows 7, and that’s where Microsoft’s base still is. Also Windows 7 sold well because people waited a decade to move from Windows XP. That’s not the case anymore. I believe Windows 8 will be around as “successful” as Vista was, maybe less.

    As for the content – how is Google’s content any less comprehensive than B&N’s content, or even Amazon’s? They are behind in some ways, but also much ahead in others. I would certainly not say that Google is way behind Amazon in content. It’s just that they haven’t promoted it that hard. Maybe the rebranding of the Android Market will help with that.

    1. 1) OS not optimized for touch. *check. It is fully optimized for touch.
      2) Apps not optimized for touch
      All metro apps are fully touch optimized. There is a legitimate question as to how much support they’ll get from devs. Though what is for certain is that the Windows dev community is the largest and most active – which makes sense given the platform’s 90% global market share.
      3) Expensive hardware.
      Not sure why it would cost any more than what Android tablets are going for at the moment. And x86 versions even if priced at the 700-800 range would still be compelling because they will be true laptop replacements.
      4) Low battery life
      All the evidence up to now has shown that the new version has made huge improvements with battery life. We won’t know for certain until real world tests are done but there is no evidence that Win8 won’t be competitive here.

  5. ormy underhill Tuesday, March 6, 2012

    Kevin, can one be happy in a “fragmented” world? I own an iPad, HTC Flyer, TouchPad, android and symbian phones….each providing a certain function in my gadget universe. The whole ecosystem conversation, while fashionable, is sometimes overstated in my opinion.

    1. Ormy, sure one can be happy in that world; if one can afford it. :) Most consumers aren’t like you and me though: they won’t buy multiple tablets, let along multiple handsets. These people make up the bulk of the market, so the ecosystem is more important to them.

  6. David McCormack Wednesday, March 7, 2012

    I’ve only been playing with Win8 since the consumer preview came out last week but I must say that I’ve been wowed by the whole Metro look. It really gets under your skin and when I return to Win7 and Android afterwards, everything looks cluttered and dated (iOS looked dated two years ago). Win8 screams “touch me!” very loudly and I have to constantly suppress the urge to reach out and swipe my finger across my (non-touch) screen. I reckon it will really shine on tablets.

    As a developer, I also love the create equally capable Win8 apps using either HTML5/javascript or XAML/C#. The former will appeal to the cool kids and the latter to real programmers (*). I did a lot of Silverlight 4 development in the second half of last year and XAML/C# combined with he MVVM application architecture is very compelling, once you ‘get it’. Another advantage for devs is that Visual Studio is a far more productive dev environment than Eclipse. Fact.

    * = Chill…tongue planted firmly in cheek!

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