The iPad, errrr, "Tablet" Market

You may have heard. HP, the company who likely made many of the laptops you see in day to day ongoings, announced yesterday that they are completely going out of the consumer product business.

The Wall Street Journal writes this of the conference call:

“The tablet effect is real, and sales of the TouchPad are not meeting our expectations,” Apotheker says, explaining the movement of consumers from PCs to tablets as one of the problems with the PC division. So H-P is exploring options for its unit that “may include separation through spinoff or other transactions.”

The iPad is killing computer sales. HP thought they could be a part of this paradigm shift, but they've proven that they can't.

Only problem: HP spent a significant amount of money on producing their tablet, the HP TouchPad, which was reported as having abysmal sales since its introduction 49 days before its demise.

Literally, this thing was on the market for 49 days before HP threw in the towel. 49 days. They dropped the price by $100. They promoted the heck out of it. 49 days.

Absolute failure.

And it's really a shame. the TouchPad was easily (in my opinion) the best iPad competitor. It was behind in speed, app market, thickness, OS robustness, and physical locations to buy it, but it was easily better than anything else on the market. Besides the iPad.

And when someone goes to buy a tablet with $500 in hand, they're going to choose the iPad over the TouchPad. This is reality.

Today, HP dropped the price to $99. $99! It made even me think about buying one. Because a full tablet (no matter whether it is dead end or not) for $99 is a clear steal.

Problem? You can't find them. All the retail chains are reporting to be out of them, and the geeks are going crazy buying them up. Because for $99, why not?

Then I see this nonsense on Facebook:

Well HP has proven one thing: There's a LOT of interest in tablets, just not at $500. Which is...exactly what a lot of us have been saying all along: Apple fanboys would buy the iPad at $20,000; the rest of us would only buy it at $200 or less.

Wrong.

Apple announced several months ago that they'd sold 25 million iPads. Some at $499. Some at $829. That's more than fanboys. That's more than Apple elite. It's because Apple came into a brand new market with a price that competed SIGNIFICANTLY with anything ANYONE ELSE would be able to create. Why? Because Apple bought a huge supply of flash memory in bulk, lowering their cost. Why? Because they integrate the hardware and software better than anyone else.

Apple created a market, an interest, and a device that completely changed who Apple is and the future the tech industry is taking. They did it at a competitive price (one others couldn't match) and sold the heck out of it.

HP isn't proving that there is an interest in tablets. HP is proving that if you create a product that is worse than a competitor's and sell it at the same price, people won't buy it; then if you lower the price by $400 and sell it significantly under your own cost, then you might be able to sell the remaining tiny stock you have already produced, at what could eventually be a several million dollar (perhaps billion dollar) company loss. Cool work, HP.

There is a tablet market, but HP didn't prove anything. Apple did, and they did it in the way that counts...profit.

25 million. And that's before my dad bought one.

-B

The New Windows

I suppose we ought to get something straight: Microsoft is coming back. (If only we could keep them from taking 8.5 billion dollars and throwing it into the trash)

Today, they talked about their new version of Windows: Windows 8 (code name, not final product name). If you care, and you should, take a look at this video:

[youtube=http://www.youtube.com/watch?v=p92QfWOw88I&]

It is nice work through and through. Finally, they have a consistent graphic design paradigm, an interesting view of apps and how they function, and a well designed user interface for how a person might navigate all of these things. It appears that you'll be able to run the new touch enabled Windows on a laptop or tablet device and the user interface is much like the new Windows Phone interface on the new phones. Finally, they're doing something different, relatively clever, and they're innovating.

Apple will announce how they intend to take their app and OS concepts on the iPad back to Mac OSX next week. They gave a preview a few months back, but next week we should see more of a final product. As an example, they're incorporating the organization of apps like they do on iOS, on the Mac platform. I haven't used the new Mac OS (Lion) but initial reports on the betas speak highly of it.

What seems strange to me, both in Apple's offering and even in this new Windows offering is the distinction of user interaction. It is my current belief that the mouse and keyboard aren't going anywhere soon. It is also my belief that gesture interactions with an operating system are great on mobile devices, but feel odd with a mouse and a computer. I think Apple thought this too, as they have designed the Magic Trackpad which brings some of their gestures of a MacBook Pro to the iMac and Mac Pro series. But still, it's not great. You can only do so much without touching the screen.

[It is also worth noting that Apple discussed touch-enabled desktop machines (think iMacs with touch screens) and spoke about how they demo well and look cool, but extended use fatigues a user's arm, etc. No one wants to lift their hand to interact with a screen all day long, especially to do things like typing, etc.]

It seems as if Microsoft is going to use the same Windows OS on the tablets as they do on their traditional computers. The user interface will have a lot to do with the phone interface, but seems to be designed to be different. This is remarkably different than Apple's approach: they took the phone software and blew it up to tablet size. Because the Mac still requires a different input method, they're taking the traditional approach for the future of that operating system.

It'll be interesting to see how each pans out.

Whatever the case, Microsoft is back, and it is so good to see.

Now, to get rid of Ballmer...

UPDATE: When watching the Microsoft people explain it at the All Things D conference today, Walt Mossberg asked a great question. If you watch the video above, you'll see that apps like Microsoft Office (which have kept Microsoft afloat when Windows went downhill) still run in the old Windows 7 interface. You effectively leave one interface to enter the other. Mossberg asked why they didn't redesign the app to work in the new interface. The lady's response: "We don't think people should have to leave what they love just to change to a touch interface"

She's wrong. You do have to. You may not think it is perfect, but touch interfaces use different size buttons, different menu systems and other things. Having the old user interface for this new Windows is a cop out. Apple's system is better. Everything is redesigned and reworked for each screen size AND interaction method.

Perhaps they're coming back, but they need some help.

UPDATE 2: My favorite Apple commentator makes the same argument about how this isn't a great response to the iPad. You can read it here.

-B