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The Unexpected iPad Effect: Android Tablets As A Marketing Commodity

How long will it be before a cornflakes packet comes with a free Android tablet, as long as you buy three packs, not two?

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A newspaper publisher in Philadelphia is giving a $99 tablet to customers who sign up for two-year subscriptions to its papers, and GameStop is planning a dedicated gaming tablet based on older hardware running Android–meanwhile it’s confidently and cheekily offering cash back for traded-in iPads, iPhones, and iPods. Tablets as marketing gimmicks: This, ladies and gents, is the side effect of the iPad’s continuing success in dominating the new portable computing genre. 

The tablet that the Philadelphia News Media company has chosen as a marketing “prize” for its newspaper PR effort is the Archos 10, which was selling for around $300 late in 2010, and currently goes for between around $160 to $230. It sports either Android 2.1 or 2.2, and has a 10-inch screen inside a pretty chunky case (at 12mm deep it’s nearly 50% fatter again than the iPad) but does rock connections like HDMI. Hence PNM is probably taking a slight hit on selling the tablet at $99–but bolsters this by securing two years of subscription revenues (though that’ll eat into whatever profit it ekes out on selling its content in this deal).

GameStop, meanwhile, is planning its own “GameStop certified gaming tablet.” We don’t know exactly which device it’ll be demonstrated on, but it’s been confirmed by GameStop itself that it won’t be a new device–likely meaning a currently on-sale Android-powered tablet PC, which will (like the Archos mentioned above) be pretty out of date when it actually gets to a release date in early 2012.

Nothing is wrong with either of these tablets, and they’ll surely be a hit with some members of their target audience. But once you ask a couple of hard questions, the picture looks different.

Who is the Philly news industry trying to appeal to? If it’s the iPad generation, then they’ve failed totally. Reading, surfing the web, and gaming on an iPad (even the first version) is going to be much slicker and more satisfying than using Android 2.2 on the Archos–Android’s first real tablet-optimized OS is version 3.0, and the performance of the Archos device just isn’t going to marry up to Apple’s. The public is aware of this, from using iPhones and seeing the glitzy “it just works” Apple ads on TV. Sure, $99 sounds kinda cool and some customers may shell out the cash for a “throwaway” tablet they don’t mind their kids trashing. But $99 is a large share of an iPad’s price, and we’re betting many folks will just sit tight for a few more months and spend the cash on the iPad 3. If PNM is trying to appeal to the older generation, who may be wary of the new computing revolution, then it’s also not going to work–the device really is no iPad, with its trademark Granny-pleasing ease of use, and who knows what’ll happen to all those tablets once their limitations are quickly discovered.

Meanwhile, GameStop’s repurposed Android slate is going to be very far behind the cutting edge by early 2012, particularly when we expect the iPad 3 to have a high-resolution screen and better CPU and graphics chips that’ll likely surpass everything else. And games make up a huge slice of the 100,000s of thousands of apps on the App Store. We’re expecting some novelty from GameStop, and it looks like the store will be trying its own version of an online game-streaming service (like OnLive) that’ll circumvent some of the hardware limitations. But again, there are equivalent and better services on iOS. So what market is GameStop aiming at? It’ll have to price its tablet relatively low, else buyers will opt for an iPad (or possibly an iPod touch, which is doing well as a gaming machine) because of its cache. Serious gamers still like buying dedicated PCs or consoles, and casual gamers tend to do their gaming on devices that also double as phones and cameras and pocket-friendly access to Facebook.

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Which means that what PNM and GameStop are doing is hopping on the tablet bandwagon in a very desperate way, with a PR message that says, “Hey, we’re embracing the future!” but doing so with tech that’s not exactly top-drawer. They won’t be the only ones. 

It’s an ambitious move, and an innovative PR move in some ways (better for the industry than sitting with its eyes shut, shouting “lalala” like the record industry did at the advent of the MP3 player). But it’s also a move that commoditizes the Android tablet. That’s not technically a problem, of course, as there are lots and lots of them lying around–Apple’s command of the tablet market is so concrete that even high-performing top-end tablets like the Galaxy Tab from Samsung aren’t really making a dent in market share. The recent HP firesale of its canceled TouchPad device shows that there is a market for a cheap tablet PC–and $99 is very tempting. But many of the Android tablets on sale right now at or near that low price just don’t deliver, and the market share figures suggest that they’re not really selling either–even at knock-down prices. 

The trick with a commodity is to move a lot of units, to make a profit off meager margins, or to push sales of a better revenue-generating system along with them (which would be the newspaper for PNM and the streaming games service for GameStop). But it’s hard to see how these two companies really expect to make the plan work, when Apple’s industry-leading machine keeps evolving and really isn’t very expensively priced. It’s precisely this fine line that Amazon has to walk with its upcoming Kindle tablet PC.

Perhaps the notion will only really work when the price of a tablet has fallen so far that you really can buy-one-get-one-free at your local Walmart. And then the world of mobile computing will have changed, from a past where we only imagined owning tablets to a future where we’ve got three or four of them, some unused, lying around the home.

[Image: Flickr user JayHay2336]

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