Friday, 29 June 2012

Surface vs. Nexus: the tablet equivalent of Italy vs. Germany

Last week it was Microsoft, this week Google’s turn to launch an own-brand, own-operating system tablet. Now all of the tech majors have their own platform and the games are well and truly afoot.

Google scored an early hit against Redmond by promising imminent release of their Nexus 7. As I wrote about recently, Microsoft’s marketing strategy seems rather flawed. In my view one of the key pillars of the Apple marketing model is the “here’s something amazing... which you can pre-order now and buy in stores in 2 weeks” promise. Microsoft have shown us something really interesting, but it’ll be months before we can actually buy a Surface Tablet.

And when we can there’s another problem: which one to choose? Another Apple trick is the simplicity of its product range. One tablet (albeit with 6 minor variations), one phone (3 variants), 3 notebooks, 3 desktops. They don’t launch them simultaneously. 2012 was a Macbook Pro refresh year. Next year will be Air and so we go on – it’s always easy for the consumer to select which Apple tax to pay.

Microsoft messed this up by offering Surface in not just two models but two fundamentally different architectures. It’ll be difficult for most consumers to decide what the implications of choosing ARM or x86 will be to their long term happiness with the device. This is particularly acute for Microsoft since Windows 8’s application ecosystem will be very thin at launch in comparison to those of iOS and Android.

Google have avoided this trap. Nexus 7 is available in one model and 2 capacities. Better still, its $199 price point is spot on to capture those consumers who have Android phones and aren’t willing to stump up the $400 needed to get into an iPad.

That price point has led a number of reviewers to label Nexus 7 as a “Fire killer”. I think they’re wrong.

Although Nexus delivers a conclusive smackdown to Kindle on specification and industrial design, I suspect that Amazon has it licked on user experience and – crucially – content ecosystem. Kindle Fire is a remarkable piece of software design in that it renders the complex world of digital content and operating systems simple. For those who haven’t had their hands on one yet, Fire represents all your content, apps and even websites as books on a shelf.

What this means is that – to an even greater extent than on the iPad – consumers can pick one up and instantly know how to get to cool stuff. Oh, and they’re never far from being able to buy it, either. Google haven’t yet figured out how to make their reference Android skin perform the same trick. Android is great if you’re a Linux coder, but simply isn’t logical enough for the tablet market. Tablets are windows onto content. Android is steamed up. And Google keep drawing pictures on the Glass.

Microsoft, like Amazon, will score points against Google with the instant ease of use of the Metro interface. They might be able to hit a knock out if they tap the rich ecosystem that is Xbox Live. Better still – and this would make me consider ditching my iPad – they could provide an On Live-style cloud based console gaming experience on my tablet, with my profile and saved games drawn from Xbox Live. I’d pay decent money for such a service and I suspect a substantial proportion of the 100Mn or so Xbox gamers would too. Consoles are as much of an adult toy as a kid’s one these days. My generation grew up packing light guns.

So where does this rambling get me? If I was placing bets, I’d predict Fire and Nexus 7 doing similar numbers for the rest of the year, mostly by virtue of the fact that Amazon can’t afford to launch the Fire outside of the US. Amazon only make about 20c gross margin on the Fire and they aren’t exactly flush with cash to subsidise the higher total lifetime value of its users.

Microsoft? I reckon if they shift 500,000 this year they’ll be doing well. 1Mn would be a miracle. But they happen. Italy beat Germany after all. New, ascendant, creative, hard charging, new buck beaten by flakey-round-the-edges, but ultimately calculating old master. Sounds spookily familiar. Forza!

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