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Why Android will win the tablet wars

by Glyn Moody

The Apple iPad is a huge hit: 7.33 million of them were sold in the quarter ending in December. That's a pretty amazing achievement. But despite that, there are good reasons to believe that 2011 will mark the start of the ascent of Android as king of the tablet world.

One person who definitely doesn't believe that is Apple's COO, Tim Cook. After dismissing tablets running Windows – “They’re big, heavy and expensive. Weak battery life. Need keyboard or stylus. From our point of view, customers aren’t interested in that.” – he made the following comments about Android tablets:

The variety shipping today, the OS wasn’t designed for a tablet – but Google said this. So you wind up having the size of a tablet that’s less than reasonable. Or one that’s not even a real tablet experience. It’s a “scaled-up smartphone” – that’s a bizarre product in our view. Those are what is shipping today. If you do a side-by-side with an iPad, some enormous percentage are going to pick the iPad. We have no concern there.

That's probably true: the few Android tablets out there are indeed little more than scaled-up smartphones. Whether that's really a "bizarre product" is another matter. But more important, I think, is the fact that soon we will see versions of Android that are specifically designed for tablets. Here's what Cook has to say on the subject:

In terms of next generation. There’s nothing shipping yet. So I don’t know. “Today they’re vapour” However, we’re not sitting still. We have a huge first-mover advantage. And a huge user advantage from iTunes to the App Store. Huge number of apps and an ecosystem. We’re very confident entering into a fight with anyone.

Well, he would say that, wouldn't he? But his comments about first-mover advantage and the size of the ecosystem also applied to the iPhone when the first Android phones were appearing in the consumer smartphone marketplace. By his logic, Apple should have been able to preserve its commanding lead over Google's “vapour”. But what happened? This:

61.5 million people in the U.S. owned smartphones during the three months ending in November, up 10 per cent from the preceding three-month period, as RIM led with 33.5 percent market share of smartphones. After several months of strong growth, Google Android captured the #2 ranking among smartphone platforms in November with 26.0 per cent of U.S. smartphone subscribers. Apple accounted for 25.0 per cent of smartphone subscribers (up 0.8 percentage points), followed by Microsoft with 9.0 per cent and Palm with 3.9 per cent.

That's just in the US, of course, but it's likely that the rest of the world will follow (for example, Android's share of page views is already increasing rapidly in the Nordic region). Indeed, I'd argue that Apple's decline elsewhere is likely to be even more rapid. One reason is because the US is Apple's home turf, so it has a natural advantage there that Android doesn't, since the latter is offered by many non-US handset manufacturers; but the more important factor goes to the heart of Apple's problem.

This is the fact that there is only one iPhone – that produced by Apple. That undoubtedly brings huge benefits – not least to Apple – but it also has a major downside. It means that users have only a limited choice of handsets, and that pricing is set by Apple. For markets outside the US, particularly in developing countries, that's a big issue.

It means that the iPhone will never be a mass market item, bought in billions; smartphones running Android will, because Android's (relatively) open ecosystem allows local suppliers to meet local requirements through very low-cost customised offerings. As a result, Android based phones are likely to become the dominant global smartphone.

The rise of Android in the smartphone sector nullifies Cook's arguments against Android in the tablet world because precisely the same dynamics are at play. Apple's locked-down approach means that it cannot compete when it comes to offering users a huge choice of systems from multiple suppliers. Choice engenders competition, which will drive down Android prices, helping to increase uptake yet further.

Indeed, the extraordinary proliferation of Android tablets has already begun. This includes famous brands like ASUS, Toshiba, LG, Samsung (with a new version of its Galaxy Tab rumoured) and Motorola, whose Xoom offering which has already garnered “huge pre-orders”, according to some reports.

But most of these are at the high end of the market, and therefore compete with the iPad. Far more interesting – and important – are the no-name systems that are beginning to pop up everywhere. If you want to get a feel for the future of the Android tablet market, try taking a look at site Newpad.cn, which covers the world of tablets. Yes, it's in Chinese, but scanning through the product page and looking for the tell-tale “Android” amidst the Chinese characters (or using this Google Translate version), it's clear that there has been a sudden rush of Android tablets launched recently (in Taiwan / China, at least) – and that's even before the proper tablet version of Android (“Honeycomb”) is available.

Next: Opportunities and challenges

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