I have heard a lot of theories about why Apple will or why Apple won’t dominate tablets.
The common argument in favor is that Apple has a head start and basically invented the first mass consumed tablet. They didn’t do this with PCs. The early days of PCs were a wild west affair with lots of manufacturers selling a small number of devices. (The Apple II, wildly successful, sold 16,000 units in its first year.) Of course, early leads often evaporate. Need an example? How about TiVo.
The common argument against is that the tablet market will be the PC market all over again with Google as Microsoft and Apple as Apple. This is wrong, too. The market dynamics are different. Google makes money from advertising, not software sales, so is unmotivated to only make a YouTube app, for example, for Android only. And Apple of 1987 is not Apple of 2007. We no longer have compatibility issues, software sales (apps) is a strong reason for owning a device or not, and there is no big, standalone behemoth to “make a market winner” as IBM did with Microsoft and Intel. Never mind the democratizing effects of the web.
So what do I think? I think Apple and the iPad will dominate the market but for a different reason than any I have heard: distribution.
First, the tablet market is vastly different from the smartphone market for this reason. We have been trained here in the United States to go to a special store to buy our phones. These stores, of course, are owned by the carriers and these carriers, to get you to sign up for multiple years, heavily discount these phones making them all appear equal — or relatively so — in price.
I believe tablets are different. I think our expectation will be to buy a tablet and then sign up for a service, if we even need one, and I don’t believe we will be hoodwinked into a multi-year contract and service plan. In fact, I don’t think most people will even buy a wireless plan to go with their device. Instead they will use the built-in wifi.
This levels the playing field. Now the game is about distribution. Apple’s competitors — RIM, Palm, Samsung, etc. — have never known a world where they sell outside of a carrier store. Android licensees and RIM, in particular, have never sold a device without carrier marketing and subsidy. Their inclination will be to sell through the same channel they know and have developed. Except this partner wants to ensure a wireless subscription and will require their partners to include it.
Apple, on the other hand, (and HP/Palm to an extent) sell everywhere: Apple stores, Best Buy, Radio Shack, Target, Walmart, even Marshall’s/TJ Maxx for goodness sakes. (What the heck is Marshall’s/TJ Maxx doing selling iPads??) Oh, and they sell them via AT&T and Verizon also.
Apple has the power of distribution, a ubiquitous brand, on its side. They aren’t restricted to a single store or a single carrier. And price subsidies will play far less of a factor. In the end, Apple’s iPad will win because it can be found and bought everywhere.