In my previous post, I discussed Apple’s ‘walled garden’
approach to its tablet and smartphone ecosystem. I described how Microsoft and
Google gain a competitive advantage by licensing their tablet and
smartphone operating systems to original device manufacturers (ODMs) such as
Samsung, LG, HTC, Lenovo, Dell, HP and Asus.
Indeed, much of Android’s success is related to multiple
ODMs working with Google and perceiving Google to be partner and not a
competitor. It has been argued that Google’s purchase of Motorola Mobility, will
prompt ODMs to work more closely with Microsoft and give Microsoft a better
chance of enjoying success in the tablet and smartphone markets with its
operating system.
However, in recent weeks, both Microsoft and Google have
announced plans to launch their own tablets that run Windows 8 and Android
respectively. Why this change of strategy? Well, it can largely be explained by the dominance
that Apple currently has in the tablet market. This is a market that Apple has
been allowed to define. The term ‘iPad’ is becoming synonymous with tablet in a
similar way to Hoover once being synonymous with vacuum cleaners.
Apple currently holds nearly two-thirds of the tablet
market. Android has not made the same inroads in the tablet market as it has in
the smartphone market. So, Google is trying to galvanize the market in its
favor by launching its new Nexus 7 with Asus. There is a widespread view that the
ODMs are not doing enough to gain market share for Android in the tablet
market.
As for Microsoft, it does not want to be left behind in the
tablet market in the same way as it has, so far, in the smartphone market. Its
Surface announcement was timed to deflect attention from Google’s
announcement. The announcement seemed to be rushed and perhaps made too early. No price
points or dates were announced and the operating system that will run on the
Surface, Windows 8, has not yet been released. Neither the Surface nor Windows
8 are ready to be sold. It appears that Microsoft is attempting to encourage
developers to produce apps for its new environments. It is attempting to create
excitement in the application development community. Microsoft executives know that the key to
success in both the tablet and smartphone markets is the creation of an
ecosystem that includes a large collection of apps. The company wants a library of apps
to be available as soon as possible.
So, how will the tablet market evolve. Everybody is moving
into hardware. Amazon, Microsoft, Google and Apple will all have their own
devices. How will this impact the ODMs. Samsung and HTC have both driven the success
of Android in the smartphone market. Will they have a similar role in the
tablet market. Are Microsoft and Google launching tablets as a way of gaining
share for Android and Windows 8 because ODMs are not doing this successfully? Will they move out of the hardware
market and leave hardware to ODMs once they have gained critical mass for their
operating environments? Or, is managing the complete user experience critical in the tablet market as argued by
Apple?
