TouchPad is Dead – Who is Left?

Huge news this week starting with the Google purchase of Motorola that puts into question the whole future of Android as a multi-vendor OS. MoD already ruminated on this topic earlier. As if that news wasn’t disrupting enough,  HP CEO Leo Apotheker just knifed Web OS in the back.

MoD has been arguing for a while that the two most obvious competitors to the iPad  would be HP and Samsung, two companies with retail consumer electronics that were not reliant upon carrier distribution deals to sell hardware. Both companies knew how to manage inventory with big box retailers and how to display their gear in big box retail environments. That was MoD’s rationale. Seemed solid to us.

Well the TouchPad has hit the market like a giant flaming turd. Despite decent ads (not as good as the Apple ads, even the Samsung commercials are better. The Russell Brand search themed ad is quite good. ) on a reasonable rotation on network and cable tv, there’s zero movement at all. The story of only 20,000 TouchPads being sold by Best Buy out of an inventory of 270,000 reach critical mass and based on the speed that Apotheker killed the TouchPad the sales story must be awful across all vendors. With no new phones or tablets from HP, WebOS is well on the way to being the Amiga of the Mobile OS wars. The best OS with many advocates that cannot find any traction at all from customers, and seems to be mismanaged by the owners.

So WebOS is done. Android for tablets is struggling, and Android itself is under extreme IP attack. If we could track sell to rates for all tablet vendors, it’s quite possible that Apple can end this year at 90% tablet market share. And the iPad 3 is looming. It’s being readied. Since most vendors will report ship to rates, it will be closer to 65 to 70% depending upon the key 4th qtr and economic scares. One last scary note for tablet vendors, there are reports of TouchPad ‘s being sold effectively at closeout prices of $199. Is that the price point needed to get “traction” (to borrow a term from John Gruber’s recent Talk Show Podcast) against a $499 Apple iPad? Can anyone afford to build an iPad quality tablet at that price point without going bankrupt?

So who is left to take on the iPad?

RIM – their device is getting little traction and carriers are starting to reject selling the Playbook. And the Playbook is still a 7 inch device at iPad prices. RIM in hindsight would have been better off focusing all the engineering energy from the PlayBook into their QNX phones. Right now, those phones not a weak tablet represent their last best shot at being relevant. And the Playbook dev environment is still in the infant stage.

Samsung – hindered by the Android tablet market. However, they at least appear ready to compete. The biggest issue Apple’s legal campaign against the Galaxy Tab. Also, Google’s new hardware division has to scare them. Also, as a Windows PC vendor, Samsung has to be waiting on Windows 8 and what that means.

Windows 8 – Just when you think Microsoft’s glacial response to the iPad will be too late, every other competitor is dropping the ball leaving room for Microsoft to claim the second position. Unlike any other player Microsoft will not give up quickly. They will keep developing and improving. We’ve seen it work recently with the XBox 360 and fail with the Zune. They will likely be facing a tremendously powerful entrenched opponent in the iPad teamed with the powerful iPhone, the ultimate tag team in the mobile gadget war. The real question is whether the tablet war is the PC battle from the late 80s, or the MP3-iPod battle, or something completely different. It’s impossible to make any projection without seeing any sample tablets running Windows 8. The Wintel folks cannot match the MacBook Air, can they build something that runs Windows 8 that matches the relative speed of the iPad. We know what the iPad is going to be like in 2012, quad core ARM based processor, gig of RAM, enhanced video capability, and a Retina Display. And it’s a moving target in terms of price.

Amazon – Amazon has the media library to challenge the iOS – iTunes duopoly. Amazon has had success establishing a brand name electronic device. Kindle is a big hit. Amazon is the wildcard. And they maybe planning a cheaper tablet device that targets the cheapest price point possible. Amazon might be willing to further reduce the price to sell their higher margin media content. However, Amazon could cripple the device from a video performance standpoint or as rumored it could be significantly thicker than the iPad and appear clunky or cheap. Also, Amazon’s will probably push their own application and media stores exclusively and could run into problems with Google denying them access to the latest Android builds.

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