Saturday, May 14, 2011

Why Android (and other tablets) aren't selling well

Nvidia CEO Jen-Hsun Haung spoke with CNET, the popular Internet news site, earlier this week to discuss tablets and why they aren't selling well. Haung's comments focused mostly on Android tablets but I think they could expanded to include the entire tablet market with the exception of the Apple iPad, which I believe sells mostly on hype.

Haung claims that there are basically four things hurting tablet sales: point of sales, sales location expertise, consumer marketing, and price. While I certainly wouldn't deny any of those four points are true, I think he's missing a few others that affect tablet sales even more:

First, most people don't really see a need for a tablet in their lives. They already have a desktop PC, laptop, iPod, and Kindle, so what is a compelling reason for adding yet another device that replicates much of the functionality of devices they already own to the mix? People see tablets as cool but, let's face it, after the initial newness wears off, many of these devices will be relegated to the shelf where they will never be used again. There's no 'killer app' for tablets yet that makes owning one compelling.

You can tweet from the train at work on your shiny new Motorola Xoom? So can I from my cheapo Blackberry Curve and it's even less bulky than a tablet. Facebook? News sites? Video? Yep, I can do that from my Blackberry too or, if I want a bigger screen, I have a laptop that weighs just a little more than a tablet that I can bring with me very little hassle. Nothing compelling there. Games? I don't play them much. But, if I did, I have a laptop, a desktop, a Zune, a Nintendo 3DS, and a Blackberry all of which are very capable of playing games. Nothing really 'killer' there for tablets.

You know where tablets would shine? In hospitals, nursing homes, offices, and places where people constantly move around a building or a location. But that's not the average consumer. That's not 'Joe and Jane Sixpack' and that's who's going to drive tablet sales mostly.

Next, I think we're experiencing 'consumer tech fatigue'. We are literally being deluged with new 'must have, cutting edge' products every single day. Gaming machines, laptop, handhelds, and netbooks, are all stuff that we just 'couldn't live without' and would 'change everything' until we realized we could and they didn't. Now we're being told the exact same marketing story about tablets and consumers just aren't ready to jump into a new arena of 'the next must have device'. At least not until there's a real reason to and so far there's not.

Adding to that fatigue is the fact that users simply don't know which one to buy. The iPad is impressive but then so is the Xoom and Galaxy. And consumers know that, whatever they buy, they will be presented with new, better, upgraded, versions within a year and be expected to jump on the bandwagon yet again.

It's all just too much for the average consumer and it's one of the reasons I think a lot of people are simply opting not to play the game at all. Besides, give it two years and something will come along to replace tablets just like tablets came along to replace those 'OMG you have to have it!' netbooks we all bought a few years ago.

Lastly, and this is something Haung brought up in his comments, is price. Tablets are expensive for the little they do. It's almost impossible to get a tablet for under $400 and, with the price of gas, food, and other goods, most people aren't going to bite that price point. Looking cool doesn't and having the latest tech doesn't matter when dad's out of work and mom is stuggeling to make her paycheck stretch enough to feed the family.

Prices have to come down and come down hard before the 'average' consumer is going to jump on the tablet bandwagon. It's just not a compelling enough experience to justify spending that much money these days.

Of course, I could be totally off base here. 'Joe and Jane Sixpack' may not even be within the target market of the tablet makers. Maybe they're all after the urbanites who are so obsessed with being cool that they'll pour money into anything that comes along and promises to increase their status among their friends. Maybe the 'average' consumer doesn't matter at all and it's all about hooking the 'early adopters' and 'first movers'. But, if that's the case, I think tablet makers are missing a huge market that could double or triple in the next two years if they played their strategy right. But, before the market moves, there's got to be a lot of change and it has to happen fast.

Tablets are cool. They're convenient and easy to carry around. I'd really look cool at the coffee shop pulling out a Xoom or an iPad. I just can't figure out why I really *need* one though.

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