Only Two Companies Can Compete with iPad: Amazon & Microsoft

I’ve been saying for months that Apple will dominate the media tablet market with the iPad the same way it dominated the digital media device market with the iPod. In fact, I believe that Apple will maintain 66% of this market, or more, for the foreseeable future (I’m hedging there — I really think it will be more than 70%, but don’t tell anyone).

This projection on my part is a direct reaction to Fandroids (and many Wall Street analysts who don’t qualify as Fandroids) who have been eagerly anticipating and predicting that Android tablets will quickly catch up and pass Apple’s iPad in unit sells the same way that they have passed iPhone in the smartphone market. For instance, Mike Abramsky of RBC said in early March of this year that this would happen by 2014.
At that time, I made the case that he was wrong — read that for details, but the short version is that I said that apps matter more on tablets than on smartphones, and that while accessing the Internet (something iPhone and Android devices do comparatively well) is the killer app for all smartphones, the experience is the killer app for tablets.
Hmmm…I don’t think I said it quite so elegantly at the time, but that’s how I think about it today. I also wrote a passage about Apple being the price leader in tablets, but in this piece I’m focusing on the experience part of the equation because it’s the experience the iPad offers that sells the device, not the need for a media tablet per se. Indeed the need for a media tablet doesn’t exist at all, only the desire for one.
To really hammer in this point, that desire has so far been defined and created by the experience the iPad offers, and the extension of that thought is that Android tablets don’t have an experience to offer, and I don’t think they ever will.
There are two companies that might be able to bring an experience to their media tablet, however, and if they are really, really lucky, it might even be a compelling enough experience to get people to want one. Those two companies are Amazon and Microsoft.

If you’re like me, you’ll find that suggestion at least a little surprising. After all, Amazon isn’t a hardware company (Kindle notwithstanding), and Microsoft has systematically failed at just about everything it has tried in the last several years, especially when it comes to the company’s mobile strategy; but, and this is a but big enough to earn the Sir Mixalot Seal of Approval™, these two companies have some assets and weapons to bring to the media tablet fight that no one else has, not even Hewlett-Packard (more on HP at the end).

Amazon

As I wrote in our coverage of a rumor coming out of Taiwan that Amazon had already put in an order for their own tablets, Amazon has content relationships in place for music, TV shows, movies, and ebooks. With a little backend work, Amazon can readily deliver this sort of content directly to a tablet almost the same as Apple.

No, not as well as Apple, because Amazon doesn’t have Apple’s expertise in software and UI, and Amazon won’t have control over the whole widget. Amazon will, however, have more of the widget than any other competitor. They’ll control the hardware and the content stream, and that’s a foundation for an experience. Amazon even has a cloud-based music player in the wild, something Apple is rumored to be working on, and such a product further narrows the gap between the two companies.
Amazon also has its own mobile app store (with apologies to Apple) in the form of the Amazon Android Appstore. More importantly, Amazon has a relationship with a few hundred million customers around the world who are used to coming to its Web site to — get this — buy stuff. Who else can say that? Samsung? (No) HTC? (Who?) Generic Chinese Electronics Company Flying In To CES To Show Off Vaporware? (Please).
Not even Google has customers who see its site as a destination for making purchases, but Amazon does. Amazon can push a media tablet the same way it pushes the Kindle to its customers, and it can then deliver apps and content to those tablets. It’s also very important to remember that most of that large customer pool will no doubt be comfy using their Amazon accounts to buy those apps and that content just like iPad owners use their iTunes account to buy apps and content.
This is the single closest thing to Apple’s iTunes ecosystem as exists anywhere in the world, and because of that Amazon has a vague chance of being able to sell tablets when every other Android tablet maker has so far spelled tablet as F A I L.
Now, will Amazon sell the 700,000-800,000 tablets a month DigiTimes said it might order? Not unless Apple is selling five times that many, and I don’t see that happening this year. There are a lot of things that have to come together for Amazon to pull this off, but the company has a better foundation than anyone else for being able to try.

Microsoft

Microsoft has a different set of unique abilities that the company can bring to bear against the iPad, and for the Windows maker it starts (and probably ends) with the living room. Microsoft has the Xbox and Xbox Live. And Kinect. In the grand scheme of thing, Microsoft has the single strongest footprint in the living room of all iPad competitors and would-be iPad competitors. Microsoft has a much bigger footprint in the living room than Apple itself.

I believe that Big Redmond’s biggest opportunity for creating an experience for a Microsoft tablet is to integrate its tablet with the Xbox. Make it a game controller, make it a means of accessing the Internet and browsing Internet content through your TV, make it a way to chat with your opponents while you are playing, to see additional game content like maps, scores, bonus rewards, whatever. These kinds of things make for an experience that many consumers would find attractive.
Imagine being able to start off a Kinect video chat on your TV and be able to pick up your Microsoft tablet and take the conversation into the kitchen using a camera on the device without having to change anything? That would rock.
Heck, being able to choose games and enter player names without using a damned handheld controller — that alone would make it compelling to me, but then I’m all old and stuff. I hate game console controllers.
This is a strength that only Microsoft has. Sony could try to work this angle with its PlayStation platform, but it won’t. That once-great company is too busy dropping balls to successfully create a proper tablet experience. Dropping balls is hard work and just too-damned time consuming.
Getting back to Microsoft, the company’s living room foothold offers Microsoft a shot at building a tablet experience. Not only is it a unique asset for the company, it also offers Microsoft the chance to not copy the iPad, just as Windows Phone 7 is the only post-iPhone smartphone OS that doesn’t try to copy the iPhone.
While Google busily follows in Apple’s footsteps with the look and feel of Android, and Android hardware makers have mostly worked in the iPhone’s hardware image, Microsoft had the guts to offer a completely different approach with Windows Phone 7. I prefer iOS, but I really think Big Redmond deserves a lot of credit for trying to offer something different. Doing so with a Microsoft tablet could be part of creating a compelling experience with the product.
At this point, however, I should acknowledge the elephant in the room, and that’s the minor fact that Microsoft isn’t currently a competitor in the media tablet space. The company still provides Windows 7 for tablet PCs, but hasn’t made a play for media tablets at all. I’d like to think that’s because someone at the company figured they should take the time to do it right, but we’ll have to wait and see.
I also want to stipulate that I don’t necessarily think Microsoft will do all this stuff right, I’m just saying they have a better opportunity to be successful in this market than anyone besides Amazon.

Poor Ol’ HP

In times past, I’ve said that I was excited about what HP might bring to the media tablet market. This is entirely because HP is the only other company besides Apple to control the software (WebOS) and the hardware. Because of that, I think that HP might be able to make an excellent WebOS tablet.

I still believe that on its face, but I am not including them as a third major contender for bona fide iPad competitor because I don’t think the company can put together the right content and app assets to offer the experience I’ve been talking about.

HP might be able to offer WebOS tablets that will do well in vertical enterprise applications (presentation, remote access to the enterprise-in-the-cloud, inventory management, etc.), but I don’t see the company being a contender in the consumer space, Jon Rubinstein and the other former Apple-employees he’s collected notwithstanding.