Tablets – Why Marketers need to move out of the “Tablet – a Fad” Perspective!
For many of the marketers out there – there is not a great case for Tablets and Smartphones together. Most of them view tablets as a passing fad. This equation is perhaps complicated by the announcement of Phablets as a hybrid form and use factor! However, is Tablet really a fad?
A recent report published by the Adobe Digital Index is an eye opener. For February 2013, Tablets are attributed to be driving more traffic to websites than smartphones. The report is based on 100 billion visits to more than 1,000 websites worldwide over the last year – hence this isnt a fluke that you had blow over. Adobe attributes this shift in web browsing patterns primarily to the device’s form factor, which lends itself to leisurely (and more comfortable) browsing than smaller touch devices.
Listing down a key points on how and why Tablets are not a fad. They are here for good-
1. Frankly, with both WiFi Tablets and Entry-level Smartphones penetrating the $50 price point – the screen size is a big enabler for tablets.
2. As WiFi hotspot roll outs gather momentum – Tablets will push more and more of data.
3. So while Smartphone gathers numbers in the low end – it is the larger screen size devices (3.5″ – 4.0″ – 5″ – 7″- 9.7″) which will posssibly drive higher data consumption.
4. The customer at the economy end of connected devices ($50-$100) tends to use his device as a media machine – again for the $50-70 price – a tablet provides greater value than a 2.8″-3.5″ smartphone given the profusion of pirated content.
5. Tablets are also driving penetration across segments such as education, insurance for the large screen internet access advantage
6. For the Phablet space – this is a sub-category branching out into becoming a category by itself – but its numbers will take some building up – and the pricing still is $200 & above.
7. With tablet growth rates still well above smartphone growth rates, expect this gap to widen
8. Traditionally because of the higher screen size the engagement time on tablets has been higher than the smartphones as well.
Interestingly enough, in mature economies, Tablets have found yet another niche. Tablets are increasingly being used shopping activities.Adobe found that 13.5% of all online sales were transacted via tablets during the recent holiday season. Furthermore, as of January 2012, researchers found that consumers using tablets spent 54 percent more time per online order than their counterparts on smartphones, and 19 percent more than desktop/laptop users.
Thus the key take away from the Adobe report is this – tablets and smartphones are two different animals. Based on consumer use cases, one does not replace the other because mobile device owners are using tablets and smartphones to accomplish different tasks. This has implications on the way e-commerce companies as well as media companies and online content distributors would play up to serve the user. So this really gets into single device – multi use cases scenarios – all of is still building.
Thus i come back to my initial point – Marketers who are apprehensive of the scale and scope of tablets and are unable to fix “proper” answers to tablets, need to understand, there is no single answer… and the answers too are evolving at a fast clip! The risk that they run in trying to perfect the business cases and create understanding is that they could be left out of the markets. Proposition here is possibly not a case of inspiration but of evolution!
Google and the principle of more wood behind fewer arrows! ( Service Prioritization and End of Life)
Google prioritizes its products and services and while it is constantly innovating in different levels and layers of services – it is equally ruthless in chopping of products and services which donot support its strategic imperatives and directions.
From an outsider’s perspectice, the following principles are evident as a part of Google’s service End of Life (EOL) strategy.
1. Products and Services are shelved as and when a better substitute (in terms of delivery mechanism or service/customer experience) is in place
Examples include HTML over UiApp, 3D imagery (Street View) over Google Building maker, Android/Chrome over iGoogle, Youtube over Google Videos, Google Drive on desktop over Cloud Connect, Google Shopping over Search API and many more.
2. Axing stand alone services in favour of a platform approach
For Instance HTML5 over Voice App for Blackberry, Google Apps/Vault over Postini (and many more)
3. Inadequate or middle of nowhere solution!
Lack of success of Google Wave was attributed among other things to its complicated user interface resulting in a product that was a bit like email, a bit like an instant messenger and a bit like a wiki but ultimately couldn’t do any of the things really better than the existing solutions
4. Services that are simply non-core i.e it doesnot extend Google’s strategic imperatives
Google Classic Plus was a customization service that let people upload or select images to use as a background on Google.com. However, it really was noncore in terms of customer experience or service delivery. It was hence dropped.
5. And then there is Performance…
Google Health (inspite of all its promise) was axed as it was seen not having the broad impact that Google had planned. Same goes with Google Apps for teams as well.
Listed below are a list of services that have been chopped over the last few years – for not having made the Google cut – its a case of Google forever prioritizing and trying to put more wood behind fewer arrows
Android – Google’s best strategic move ever?
Android controls 70% of the Smartphone volumes in 2012. Over the last 4 years, ever since Google launched Android, this has been one huge success story. In this post, i am looking at the 3 factors that have fueled the Android’s success story. The success generated by Android is across three key levels – Present day revenues for Google,Access to mobility for Google and generating intelligence and information about the user – creating profile and semantic patterns which is the future of advertising as we know it.
While Google’s intent behind Android was such that it was not completely shut out of the mobile Internet by a dominant OS provider. The initial fears were around the dominance of Microsoft which in the post 2007-iPhone era came to be Apple. However, it just did better – it went on to become the dominant OS in Mobiles and handhelds itself.
We all know that Google makes almost all of its money on ad revenue – 94% of Google Q4 revenues were based on advertising. Of this $8bn was generated by mobile devices of which, analysts now expect $5bn of 2013 Google Ad revenue to be from tablets alone! That makes it seem like a pretty solid investment for Google to pay whatever it does to be the default search engine in iOS ($1 billion/annual), since the iPad still holds close to half of tablet sales.
Android is Google’s footprint on mobile- An Android device, properly signed into a Google account and running all the Google Apps, generates an endless stream of little bits of ‘signalling’ information, way beyond what Google gets from a desktop search user even if they’re using Chrome. It knows where the user lives and works, how he commutes – and which phone numbers on web ads he dials. All interactions with Search, Maps and anything else can be linked together. Android, allows Google to tie searches and advertising to individual people and places. In the long term, the data that Google gets from Android users is probably just as important as Pagerank in understanding intent and relevance in search. The real structural benefit to Google from Android now comes from the understanding it gives of actual users, and the threat comes from devices that do not provide this data.
It is quite possible that even Google didnot see the scale of success of Android – Not only did it mark Google’s entry on mobiles, it also is generating revenue and most valuable user information.
Productizing Tablets for Enterprises – The trade of between Productivity and Mobility
With 25 million tablets selling of in Q2, 2012 globally, tablets could very well have arrived as the third device in the mobile stack - PC and smartphone being the first two devices. But do we find productivity yet on the tablets? Or would they always remain as consumption devices?
Tablets aren’t really new. They’re big PDAs. We do calendaring, note taking, alarms, and notifications on tablets — but so could a PDA, all the way back to the Newton. We’ve been using this kind of touch-based organizer for over a decade at the executive level (remember the clumsy tablets from Microsoft?). They’re coming into their own stride, but we still struggle with leveraging them for productivity.
Many IT professionals are wondering how tablets are going to affect the enterprise. We’re all trying to work out if, when, and how these devices are going to impact our work. However, I’m not sure we’re asking the right questions about these devices. Given that customized, purpose-driven appliances and tablets are the best answer to the ever increasing productization requirements, the case is still largely inconclusive. We (Marketers in general) are all over the place trying to figuring out how to leverage mobile platforms. We’re looking desperately for a use model. This lack of a definite conclusion reflects the entire industry.
The classic innovation and monetization syndrome is that if we don’t innovate and implement this exciting new technology, our competitors will — but don’t worry, they’re as uncertain about how to proceed as we are.
Coming back to the use cases of Tablets for the enterprises, I see two major tablet applications:
- Better mobile connectivity than PDAs. In particular, tablets are able to give a more feature-rich browsing experience and reasonable email communication. They also tend to work better with web apps like OWA than previous mobile devices.
- Ability to design and deploy custom native apps.
The trouble seems to be one of convergence and transition. We’re transitioning from a desktop OS, application-based, business productivity environment — Office, Outlook, PowerPoint, and local applications running on a traditional PC. We use server-based back office, HR, and business processes platforms. Those are behind on developing meaningful mobile options, and they don’t yet rival traditional desktop PC methods in features and convenience. The value add of having a mobile device is offset by the limitations, where it’s an option.
Another driver is the convergence of cloud technologies and mobile devices. Public clouds make enterprises nervous, private clouds lose a lot of the supposed benefits of public clouds, and IT seems reluctant about adopting any cloud. But mobile devices are cloud pods. They’re lightweight devices designed to buzz around the cloud — gathering, creating, sharing, or moving information. Storing my private music and movies on the cloud is one thing, and storing my critical corporate IP there is another. The personal digital assistant part of the PDA is becoming a reality with Now and Siri, but we’re asked to place a lot of trust in allowing a cloud to collect meaningful information about us. Without that, we can’t reap the benefits of these solutions.
The enterprise challenge is that these mobile consumer devices take away the granular control of a PC. Ultimately, things are still sorting themselves out for tablets in the enterprise. It’s still very difficult to see where these technologies might take us.
Maybe Microsoft may have a few answers!
The Three Platform paradigm in connected future of technology
The future belongs to connected experiences over a large range of devices starting from Smartphone, Tablet, Networks and not limiting only to TV, Vehicles, Home appliances and more. As a new era of convergence sweeps in, increasingly its evident that the Apple, Android and Windows will lead this march of convergence into the future.
Apple leads by the experience example on a relatively modest number of its own devices. The key will be the experience factor which will power Apple as a high margin and profitable enterprise. The key challenge for Apple will be to enable experiences seamlessly across platforms and devices. Apple will not be in the game of out-innovating Android. It will be more about how well it is able to merge exepreince, interface with technology services on various platforms and devices.
Android will emerge as the mass vehicle. Being open and free will anchor a lot of innovation, some of it across some very new devices and interfaces. The key here is Android’s flexibility which will provide sound base for innovation across platform and devices. The challenge for Android will be in terms of providing a common user experience. There may not be any pure Android experience since innovation on various platforms will add to disintegration of the “pure” Android Interface and experience. This is both good and bad for Android (the Amazon example) because it would mean staying ahead of the curve at the cost of not having an interface as good as Apple.
Microsoft Windows will consolidate its Enterprise position and leverage its advantage across legacy platforms and security. Microsoft however has been loose in bringing innovation to markets. For every Kinect, there is a surface which is not yet commissioned. However, Microsoft’s niche has to be the enterprise and with its Windows8 it is trying to establish credibility across mobility experiences. Microsoft may still be lagging the “killer app” in enterprise mobility- and a Balckberry acquisition can give it just that edge in terms of the Blackberry infrastructure. There are some reports of a acquistion afoot. Interestingly enough Blackberry has put off its QNX platform till end of 2012. If one wishes to read between the lines … a struggling Blackberry puts off QNX almost indefintely, a Microsoft is fishing for “the killer enterprise app”, RIM is a prime sell off target, Microsoft had evinced interest…. is the acquisition a near reality?? We shall see
App Usage powering Mobile Internet growth
The era of mobile computing, catalyzed by Apple and Google, is driving among the largest shifts in consumer behavior over the last forty years. Impressively, its rate of adoption is outpacing both the PC revolution of the 1980s and the Internet Boom of the 1990s. Since 2007, more than 500 million iOS and Android smartphones and tablets have been activated. By the end of 2012, Flurry estimates that the cumulative number of iOS and Android devices activated will surge past 1 billion. According to IDC, over 800 million PCs were sold between 1981 and 2000, making the rate of iOS and Android smart device adoption more than four times faster than that of personal computers. While the Internet began its commercial ramp in 1996, iOS and Android devices have seen double the number of device activations during its first five years compared to the number of Internet users reached during its first five years (Internet 1996 – 2001 vs. Smart devices 2007 – 2012).
On top of this massively growing iOS and Android device installed base, roughly 40 billion applications have already been downloaded from the App Store and Android Market. The average smartphone user, is beginning to spend more time in mobile applications than they do browsing the web.
This chart by Flurry compares how daily interactive consumption has changed over the last 18 months between the web (both desktop and mobile web) and mobile native apps. Ever since June 2011, time spent in mobile applications has grown. Smartphone and tablet users now spend over an hour and half of their day using applications. Meanwhile, average time spent on the web has shrunk, from 74 minutes to 72 minutes. Users seem to be substituting websites for applications, which may be more convenient to access throughout the day. People are now spending less time on the traditional web than they did during an year ago. This drop appears to be driven largely by a decrease in time spent on Facebook from the traditional web. In June 2011, the average Facebook user spent over 33 minutes on average per day on the website. Now, that number is below 24 minutes. Time spent on the web without Facebook has grown at a modest rate of 2% between June 2011 and December 2011.
Even while, the growth in time spent in mobile applications is slowing – from above 23% between December 2010 and June 2011 this year to a little over 15% from June 2011 to December 2011. The growth is predominately being driven by an increase in the number of sessions, as opposed to longer session lengths. Consumers are using their apps more frequently.
Facebook is the most used app on Android among 14 – 44 year olds, surpassing usage of Google’s own native, pre-installed apps. Additionally, Facebook Messenger became the top downloaded app, at least one time during 2011, across more than 100 different App Store countries. In the U.S., the largest App Store market, Facebook Messenger ranked as the top overall app across all other apps across all categories.
Has Microsoft lost out on its Tablet opportunity? (Part II)
Continued from an earlier post
In the earlier post i have examined 2 reasons why Microsoft’s bet on its legacy enterprise solutions is not a surefire formula to success in next generation computing devices. In this post, we examine the other 2 reasons: Applications and Pricing as two other deterents to the success of Microsft in Tablet space.
The mastery in Apps…
Windows 8 is the Microsoft’s most important bet ever. However, Windows 8 is only a tablet on the surface — there’s no guarantee that app makers will jump on board to create great touch-enabled apps as they have for the iPad.
Microsoft has pushed its own proprietary developer platforms like .NET and Silverlight. The main programming environment for the Tablet UI — is going to be HTML5 and JavaScript. This is a conflict situation around Windows 8 which Microsoft needs to clarify for the developers to think, plan and work with the platform.
Android and Apple have moved in on application development, and even enterprise use, areas where Microsoft with its cadre of developers should have been reigning supreme.
The Pricing Conundrum
The upcoming tablets running Windows 8 are being squeezed between low-cost tablets from Amazon and the $500 iPad with its well-established ecosystem.
On the low end, Amazon and Barnes & Noble can sell tablets as a loss-leader that get users to buy more digital content. Microsoft can’t compete there because it simply sells the operating system and its hardware partners won’t be willing to match Amazon’s price because they have no services on which to make money.
Microsoft’s fee for Windows 8 tablet version will be $30+. If that is true, right off the bat, the bill of materials costs of Windows 8 tablets will most likely force prices much higher than today’s low-end iPad. If Apple starts lowering its prices in 2013, as I suspect it will, Windows 8 tablets would be at premium pricing. Microsoft’s PC partners simply might not be able to make the kind of tablet hardware that captures users’ attentions and wallets as the iPad has done.
Summarizing the scenario… slow development and delivery schedule isn’t Microsoft’s only problem- iPad’s move into office productivity, consumer interest in Android tablets, pricing of the tablets (at least versus Android) and the level of OEM support for Windows tablets may be affecting consumer interest.
Has Microsoft lost out on its Tablet opportunity? (Part I)
In Q1 of this year, when Forrester asked consumers considering buying a tablet which operating system they would prefer on the device, 46 percent said Microsoft/Windows. Now that number has now dropped to 25% — a decline Forrester said should be “alarming to Microsoft.”
Windows 8 tablets are expected to come to market starting in the fall of 2012.However, I would believe that Microsoft is taking too long to bring its Windows8 tablet, a true iPad competitor to market. While it is widely believed that technology, interface and devices would be a three horse race, Forrester believes that Microsoft may have missed the peak of consumer desire for a product they haven’t yet released. Microsoft hasnot quite been a fast follower. It is at best the 5th mover after iPad, Android, HP WebOS and Blackberry Playbook. While Windows’ product strategists can learn from these products, other players have come a long way in executing and refining their products — Apple, Samsung, and others have already launched second-generation products and will likely be into their third generation by the time Windows 8 launches.
At the high end, by the time Windows 8 tablets come out in late 2012, the iPad will have been on the market for more than 2 years, and will have an enormous head start in terms of apps and hardware peripherals. Also, in air are rumours that Apple iPad is readying a 7” tablet at significantly lower proces which would be instrumental in taking the battle to low end Amazon tablets of the world.
The ace that is not to be…
I had blogged sometime back about how Microsoft could move in through a differentiation perspective from iPads and Android tablets by focusing more on office productivity and gaming. However, Microsoft might be overestimating that business users would prefer the ability to run legacy apps (especially Microsoft Office) and that would in turn would provide traction. Condequently, Microsoft tried to get their sales force to emphasize the enterprise shortcomings (like lack of security) of the iPad when selling against it. Windows 7 wasn’t a touch-centric operating system and Windows tablets to date have been pricey, heavy and lacking good battery life.
..And Why the Office wont work
Microsoft had tablets for many, many years. And Microsoft Office had always run on them. Office has been available on Microsoft tablets for almost a decade, and it didn’t help those tablets sell .That was not a selling case for tablets (The experience factor). Plus, it’s not even clear that the next version of Office will be fully revamped for touch. Thus, Microsoft and its partners won’t have time to redesign Office for a superlative touch based experience and other applications to work with the new Windows 8 interface. So customers will see tablets with a great touch interface on top and garbage underneath.
As Robert Scobble puts it, “It (Windows) (would) really look beautiful on top, but you (user) start touching it and go deeper and it looks crap inside.”
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