The Walmart-ization of Tablets

In real estate they say it is three things: location, location, location. In merchandising it is also three things: price, price, price. Example: look at the doomed HP TouchPad.
Those who read my articles regularly know I was a big fan of Palm and waited to see what the new WebOS would be like on a smartphone before I chose the iPhone to replace my old Palm Treo. I was excited when HP bought Palm -- they said it was to get the WebOS for use in new products.

Then, out came the HP TouchPad. It is the first tablet based on the WebOS mobile operating system, which HP acquired when it purchased Palm a year ago. But although WebOS shows some flashes of finger-friendly brilliance (it seems far better suited for a tablet than for the small screen of a phone), the TouchPad suffers from cumbersome design, performance lags, and a poor app selection.

But then, apparently, HP also suffered from cumbersome design, performance lags, and poor CEO selection. Within days of the announcement of the TouchPad it was announced it was discontinued (along with the HP personal computer line, but I’ll save that for another day). The remaining stock of TouchPads went on fire sale at the crazy price of $99 and they began to fly off the shelves. The previous price was a very iPad-ish $500 and $600. Within days of that announcement they discontinued their current CEO and brought the former head of eBay in. Remember eBay? They were big in the last century.

But I digress. So, the TouchPad example shows that it is obvious that a super low price will bring out the Wal-Martians credit card in hand. No-one can resist a bargain, even if what is on sale is laughably inferior to the gold standard set by Apple.

Now we see Amazon, one of the big three in innovation (Apple, Google, Amazon -- they are the innovation leaders in this 21st century, sorry Microsoft, sorry IBM, sorry HP), release their personal clone of the iPad, the Amazon Fire. Sure Amazon had the Kindle, a bit of a revolutionary product in its own right, but with the monochrome screen and the little keyboard rather than the exciting multi-touch interface of the iPad, it just didn’t have the bling. It did its job well -- sort of like concrete -- but it didn’t excite you and raise your pulse like the sexy aluminum and glass iPad.

So what is so great about the new Amazon Fire? Well, I would say not much ... wait, make that nothing. First, it is only a seven inch screen compared to the ten inch screen of the iPad. Remember the Galaxy Tab from Samsung or the PlayBook from Blackberry -- no, they didn’t last long enough to change short term memory to long term. Steve Jobs laughingly said of 7 inch tablets that you would have to file down your fingers to use them.

Also remember you can get the Kindle app on your iPad -- IN COLOR, and also on your PC, your iPhone, your Android, you Mac, and probably on your toaster if you do a google search. So now Amazon, the Kindle people, now make a color Kindle -- didn’t Barnes and Noble already do that?

The Fire does have a powerful processor and a color, multi-touch screen. That’s good. BUT ... there's no camera, front or rear; the 8GB of onboard storage is half the amount of the base-model iPad; the Fire has no cellular options, no built-in GPS, and no Bluetooth, as the iPad or most the other clones do. The software options compared to the iPad are minimal, and the app library for Android still isn't nearly as robust as the iOS app library.

Yet, I predict it will do quite well in the market place. Why? Price, price, price. It will cost only $199. Some of that low price reflects the lack of functions since cameras and GPS and Bluetooth and larger screens all add to manufacturing cost. Plus, there are already hints it will include advertisements in its content. That’s right folks, you pay for a device that serves you ads. Sort of like the Internet.

With smartphones, part of the price of the hardware is contributed by telephone companies that get a two year contract out of the purchase. (That is not so true with the iPad. You can buy them at AT&T or Verizon, but it isn’t really like the smartphone deal, highly subsidized to sell minutes on the cell line.)

Since the Fire has no cell phone connection, it won’t be sold in the phone store. Amazon hasn't explicitly denied that it will block access to competing content-delivery apps like Hulu, Netflix, or any upstart e-bookstores that might want to be on the Fire, but I'd be surprised if you ever find them there. Amazon has taken a closed, proprietary approach with the Kindle line, and I think it's more than a safe bet to say that this won't be the "open" Android tablet experience.

So there you have it. The Amazon Fire, half the features and function of the iPad (although it does have Flash), likely a closed system, second rate apps, advertisements, and really just an appliance meant to sell Amazon content to the hapless purchaser. I predict it will sell like hot cakes. “Blue light special in aisle five.” Oh wait, that’s K-Mart. At least they didn’t use Microsoft Windows Seven (the mobile one). Or is it Windows 8?

Remember, it is very hard to make predictions, especially about the future. AND every new tablet computer is hyped as the latest iPad killer, but if anyone gets this new age of media, it is Amazon. So let’s watch what happens. Who knows? The low price -- for Apple -- was part of the iPad’s success. Maybe even lower prices are on the horizon. We will see. Let the price wars begin.

Originally written on Sept. 29, 2011.