Competitors beware: With its unparalleled platform and iPad momentum, Apple is poised to corner the tablet market.
I have been speaking with various tablet vendors lately and more than once, the topic of Apple “iPodding” the industry has come up. iPodding basically refers to the fact that although Apple has been selling the iPod for more than 10 years now, it still owns more than 75 percent of the portable digital music player market. This fact is giving many of the tablet vendors nightmares. Although they believe there is room for multiple entries given the potential market size and worldwide demand, they recognize that Apple has effectively cornered the music player market and fear that it could do the same with tablets.
Even though Apple has not cornered the smartphone market, the company reported record iPhone sales last quarter. Many realize that Apple has just started selling iPhones in China and could be expanding to other BRIC (Brazil, Russia, India, China) countries, too. Many of the smartphone vendors are certain that Apple will roll out a lower cost iPhone at some point and get very aggressive in emerging markets within the next two years. An even more difficult fact for them to stomach is that when Apple rakes in 75 percent of all cell phone profits.
While all other vendors think that they can compete with Apple in hardware, and maybe even software, they know that the secret to Apple success has been its ability to build its hardware and software around an integrated eco-system. This powerful platform is where competitors confidence level lags and the “iPodding” fears raise its head. And to be honest, this should concern them.
Because of Apple’s unique eco-system, when its engineers start designing a product, the center of its design is the platform and its related services. For most of Apple’s competitors, it is the reverse; the center of the design is the device itself, and then they consider compatible apps and services in hopes that the combination will attract new customers. In the end, this is Apple’s major advantage over its competitors and it can ride this platform in all kinds of directions.
For example, when Apple was working on the iPad, it already had the iTunes store in place. Since all content was based on the iOS platform, it was pretty straight forward to build an iOS iPad apps environment that easily sat on top of this already existing software platform. Of course, the iOS app platform already existed for the iPhone so all it had to do was create an apps toolkit to take advantage of the iPad’s larger screen size.
We will see this same concept repeated when Apple eventually releases something for the TV. The current Apple TV product is an interesting first step and is also based on this iOS eco-system. But let’s say it designs an actual TV. The platform is already in place and indeed, the center of design for any future TV is the platform itself.
A lot of vendors had hoped that Google’s Android would deliver a similar platform to build on, but to date, that has not been the case. The various versions of Android only complicate things for the vendors and the software community. In essence, there is no solid unified platform to build anything as powerful as Apple’s iOS architecture. As a result, there is a lot of fragmentation in Android, which has been at the heart of its failure in tablets thus far.
I’m unsure whether Microsoft’s new Windows 8 platform will deliver what they need either, the key reason being that Windows 8 is still based on a PC-centric OS and this is being extended to tablets. At the same time, Microsoft has a Windows OS for its smartphones that shares no code and no app base. That means that it delivers, at best, splintered apps and a non-unified eco-system even if all the devices have the same Metro UI. I believe this OS has more of a chance to challenge Apple than Google’s Android will have, especially in tablets. But the lack of a powerful integrated platform that the vendors can really design around and support, along with vendors own quests to differentiate, could prevent this approach from competing with Apple, too.
The bottom line is that it’s really all about the platform. At the moment, I don’t see anybody creating a unified and powerful enough platform that comes close to what Apple already has in the market. That is why Apple is cornering the market in mobile devices today and why it could continue to grow its user base worldwide at the expense of its competitors. Unless something changes dramatically in the Android and Windows camps to bring about a seriously cohesive platform, Apple could potentially “iPod” the tablet market given its initial iPad momentum and the mature platform.
By Tim Bajarin, PCMag