Dell talks Android tablets and the US market...

[Pliablemoose]

http://news.cnet.com/8301-13924_3-2...larger-android-tablet-troubles/?tag=cnetRiver

This week, a Dell executive threw cold water on an already-lukewarm Android tablet market in the U.S., and his comments echo recent sniping by Nvidia's CEO about the launch of the Motorola Xoom.
Though Apple has sold 25 million iPads to date--many of those in the U.S.--Android tablet makers like Motorola and Samsung are selling a fraction of that. Motorola said it has shipped 250,000 Xoom tablets. Samsung has fared a bit better, with just under 1 million out the door in the first quarter, according to DisplaySearch.
Samsung's relatively robust number includes a large chunk of overseas sales and still pales when compared with the tally chalked up by Apple, which sold the same number of iPad 2s in just the first weekend of sales in the U.S.
John Thode, a Dell vice president and manager of the company's mobility business, said in an interview with CNET this week, that the U.S. market just isn't ready for the successful launch of an Android tablet. Dell's first 10-inch Android tablet, the Streak 10 Pro, will launch in China first, sometime this summer. The U.S. market launch probably won't happen until later this year or next year, according to Thode.
"There's a bit of a haze over some early launches," Thode said about the U.S. tablet market. "I don't want to criticize competition too much, but I think the [Motorola] Xoom has had mixed success because it launched before its time. The channels were confused, the pricing was confused," he said.
That sentiment is similar to criticism leveled by Nvidia's CEO about the Xoom launch last month.
Thode continued. "Our view is rather than try to rise above that noise--or worse, add to that noise--it is better to go get some traction in a market that will be a larger market. China will clearly be the largest tablet market in the world in a very short time."
And Thode believes the U.S. consumer isn't ready yet. The Chinese consumer "is much more savvy" about tablet adoption he said.
Richard Shim, an analyst at DisplaySearch, agrees. "The problem is that you have to educate the consumers about the experience," he said. Consumers are used to comparing PCs based almost solely on specifications, i.e., price-performance--while tablets have more subtle distinctions based on the tablet's overall "experience," Shim said.
"Apple has had such success in that market because it has been able to hold the hand of the consumer and walk them through the experience," he said.
All of the tablet confusion in the U.S. also raises bigger questions about the actual size of the tablet market stateside. Though Apple has clearly succeeded, it's possible that most of the consumers who want a tablet already have one--the iPad. And the potential for a lot of demand beyond Apple just isn't there yet, at least not in the U.S.

​

I think the iPod effect is in play, Apple dominates the MP3 player market, and all MP3 players became iPods in consumer's minds in the US...

Moto's half baked XOOM didn't help matters, RIM's PlayBook is another unfinished product sold to US consumers.... The manufacturers were so afraid they would lose marketshare, they rushed products to market, and it's hurt them in the long run...

 

[zerocool84]

Meh it won't hurt them in the long run. They'll easily catch up. Hell, Apple already lost 20% tablet marketshare. It's just too much competition for Apple. We've barely started to get any decent competition so it's not like it's even close to being over. The market is just a year old.

 

[ponyo]

This is Dell talking. They need to get their house in order before talking... They haven't made relevant product in over a decade.

I don't think early Android tablet makers cared about market share. If they did they would've priced it better to get the customers locked in. Moto did rush to get the first Honeycomb tablet out but they were also greedy with the price. Just like Samsung and the carriers with their 7 inch Tab. I strongly disagree people are not ready for tablet other than the iPad. The demand has and always be there for good product at a fair price. iPad and now Transformer is proving that.

 

[Anubis]

other manufs could have easily competed with the ipod, but all the major ones just produced shit, some smaller manufs made stuff better then the ipods but no one ever heard about them

the tablets wont be the same too many major players

 

[poofyhairguy]

Consumers are used to comparing PCs based almost solely on specifications, i.e., price-performance--while tablets have more subtle distinctions based on the tablet's overall "experience," Shim said.

Translation: We are scared that the US tablet market will quickly become yet another low margin rat-race like the PC market soon, so we would rather hawk our overpriced wares in less sophisticated markets that are more susceptible to marketing manipulation.

Dell's problem is a lot like RIM's problem- they rode to the top on the back of a high-margin business customers, and any success in the consumer market they have had is due to the economies of scale and and a consumer comfortability level gained from people using their products at work. When the margins from the consumer PC market began to dry up instead of putting out more compelling products to capture more marketshare, they put their heads down and churned out derivative products that were designed to milk what profitable pockets were still left. Both companies got to the point that they lacked the internal talent to compete, and are left looking to acquisitions (QNX) or being first movers in unsophisticated emerging markets to survive.

Asus and Acer have proven that in the tablet market computer vendors can compete just as well (or better) than mobile phone manufacturers. Dell just doesn't want to, they are content with churning out crap like the Streak. I do get a kick out of the fact that Dell is selling its tablets to China, despite the fact that its flagship 7 inch streak isn't much better than the so-called chinese tablets here in the states.....

 

[preslove]

The failure so far is for two reasons. The first is that android tab makers bundled their tabs with data plans, leading to total cost of ownerships of around $1,000. 3G is a nice option, but the vast majority of consumers don't want another $30/month bill. The second is just the retail price. Pricing the Xoom over the iPad was a non-starter.

The Asus transformer has been selling very well at $400. Once good android tablets get closer to $300 retail, the price that led to a huge expansion of netbooks, the tablet market is going to explode.

 

[shortylickens]

Translation: We are scared that the US tablet market will quickly become yet another low margin rat-race like the PC market soon, so we would rather hawk our overpriced wares in less sophisticated markets that are more susceptible to marketing manipulation.

Dell's problem is a lot like RIM's problem- they rode to the top on the back of a high-margin business customers, and any success in the consumer market they have had is due to the economies of scale and and a consumer comfortability level gained from people using their products at work. When the margins from the consumer PC market began to dry up instead of putting out more compelling products to capture more marketshare, they put their heads down and churned out derivative products that were designed to milk what profitable pockets were still left. Both companies got to the point that they lacked the internal talent to compete, and are left looking to acquisitions (QNX) or being first movers in unsophisticated emerging markets to survive.

Asus and Acer have proven that in the tablet market computer vendors can compete just as well (or better) than mobile phone manufacturers. Dell just doesn't want to, they are content with churning out crap like the Streak. I do get a kick out of the fact that Dell is selling its tablets to China, despite the fact that its flagship 7 inch streak isn't much better than the so-called chinese tablets here in the states.....

Yeah thats the problem with being TOO sucessful. Eventually you grow complacent, refuse to innovate, and somebody else easily passes you by. Or everybody passes you by. Then you realize you had it too easy for too long and getting back in the game is a challenge.

Best Buy had the same issue. Now look at them. (I know manufacture and retail are two different things but it illustrates my point well, as does Blockbuster).

 

[randomlinh]

The Asus transformer has been selling very well at $400. Once good android tablets get closer to $300 retail, the price that led to a huge expansion of netbooks, the tablet market is going to explode.

That's exactly the price point where I find a tablet worth having. I just hope we don't reach it w/ crappy hardware. Transformer looks quite promising though.

 

[ponyo]

That's exactly the price point where I find a tablet worth having. I just hope we don't reach it w/ crappy hardware. Transformer looks quite promising though.

Don't worry. There are way too many tablets with Tegra2 coming to market. Not everyone of them will sell and you should be able to pick one up for super cheap sometime early next year after disappointing holiday sales and with the introduction of Kal-El and Ice Cream tablets. Remember 7" AT&T Galaxy Tab was introduced late November last year for $650 and less than 6 months later I was able to buy refurbished one for $200. Verizon and AT&T even unloaded 32 and 64 gig 3g iPad1 for like 50% off with the introduction of iPad2.

Just be patient. There will be plenty to choose from. You won't have to settle for crappy Dell Streak or Chinese knockoffs.

 

[Pliablemoose]

Don't worry. There are way too many tablets with Tegra2 coming to market. Not everyone of them will sell and you should be able to pick one up for super cheap sometime early next year after disappointing holiday sales and with the introduction of Kal-El and Ice Cream tablets. Remember 7" AT&T Galaxy Tab was introduced late November last year for $650 and less than 6 months later I was able to buy refurbished one for $200. Verizon and AT&T even unloaded 32 and 64 gig 3g iPad1 for like 50% off with the introduction of iPad2.

Just be patient. There will be plenty to choose from. You won't have to settle for crappy Dell Streak or Chinese knockoffs.

That sort of backs up Dell's argument...

 

[ponyo]

That sort of backs up Dell's argument...

Not really. Good ones priced right will sell. Transformer seems to be popular because it was priced right with unique features.

Dell is a joke. Good luck to them in China. It isn't like Chinese are hurting for crappy cheap knockoff tablets.

 

[preslove]

That sort of backs up Dell's argument...

Not really. The very idea of trying to sell all/most of your tablets with a 2 year contract was doomed from the start. If someone is rich enough to add another data line, then they'll just get a 3g iPad. So, now the carriers are sitting on all of these tabs that won't sell because consumers aren't stupid enough to get tricked into buying something with a total cost of ownership of close to a thousand dollars. Eventually they're going to have to clear that stock.

This situation is absolutely the fault of Samsung, carriers, and the me too people like dell. It has nothing to do with the market not being ready, or sophisticated enough. Once manufacturers start putting out products at the right price, android tabs are going to become quite popular.

 

[OBLAMA2009]

i bought ipad 1 but a pad without 3g/4g isnt that useful. i ended up doing most of my "padding" on my phones. the problem is that the carriers in the us insist on ripping american customers off and forcing them into 2 year contracts (longer than the lifetime of a device) so i dont think pads other than ipad will ever take off, esp with phones getting bigger screens and capabilities like plugging into monitors, they just arent that essential

i see someone already said this, keep up the good work preslove!

 

[preslove]

i bought ipad 1 but a pad without 3g/4g isnt that useful. i ended up doing most of my "padding" on my phones. the problem is that the carriers in the us insist on ripping american customers off and forcing them into 2 year contracts (longer than the lifetime of a device) so i dont think pads other than ipad will ever take off, esp with phones getting bigger screens and capabilities like plugging into monitors, they just arent that essential

i see someone already said this, keep up the good work preslove!

I disagree on the bolded part. Once you have decent options in the range of $250-$350 of Android tablets, all running Honeycomb or later, at Best Buy & Target, I think you’ll see a sharp rise in adoption. That $150-$250 will be a nice incentive to the consumer to try out Android. And, if the display models are all using the same UI, it will be a lot less confusing for the consumer when they pick up the different brands of tabs, with their various shapes and sizes.

 

[Mopetar]

It'll be a while before we see $150-$250 tablets. The iPad, Xoom, etc. cost a little over $200 for parts. A $200 tablet isn't going to have the best quality and manufacturers are going to start bundling crapware to make up for the poor hardware margins.

The hardware manufacturers are well aware of how the race-to-the-bottom turned out in the netbook market. They probably aren't overly eager to get into another position where they sell several times as many devices in order to get the same amount of profit.

 

[preslove]

It'll be a while before we see $150-$250 tablets. The iPad, Xoom, etc. cost a little over $200 for parts. A $200 tablet isn't going to have the best quality and manufacturers are going to start bundling crapware to make up for the poor hardware margins.

The hardware manufacturers are well aware of how the race-to-the-bottom turned out in the netbook market. They probably aren't overly eager to get into another position where they sell several times as many devices in order to get the same amount of profit.

I see $250 being the bottom, with for 7" screens. The Nook Color is already there. $300 and $350 will be for larger screens. I meant "$150-$250" to mean the savings v.s. and iPad.

 

[OBLAMA2009]

I disagree on the bolded part. Once you have decent options in the range of $250-$350 of Android tablets, all running Honeycomb or later, at Best Buy & Target, I think you’ll see a sharp rise in adoption. That $150-$250 will be a nice incentive to the consumer to try out Android. And, if the display models are all using the same UI, it will be a lot less confusing for the consumer when they pick up the different brands of tabs, with their various shapes and sizes.

i think whats holding tablets back more is the data plans (and the fact that they are fairly limited--2 gig?) and the improving features of phones. by the time they work all that out phones will have big/nice enough screens that for most people tablets wont make much sense.

 

[ultimatebob]

I tried the Dell Streak tablet at Staples, and was not impressed at all. The touch screen was unresponsive, and the software was uninspired. Stock Android 2.2 with practically no bells or whistles at all.... it was like using an over-sized smartphone.

I gotta hand it to the Blackberry Playbook and the Motorola Zoom... at least they're trying to develop a practical tablet interface. Dell is just doing what Dell does best... slapping someone else's stock OS on some fairly generic looking hardware.

 

[zerocool84]

I tried the Dell Streak tablet at Staples, and was not impressed at all. The touch screen was unresponsive, and the software was uninspired. Stock Android 2.2 with practically no bells or whistles at all.... it was like using an over-sized smartphone.

I gotta hand it to the Blackberry Playbook and the Motorola Zoom... at least they're trying to develop a practical tablet interface. Dell is just doing what Dell does best... slapping someone else's stock OS on some fairly generic looking hardware.

Umm because the Streak Is a phone.

 

[poofyhairguy]

The 7 inch Streak is a tablet, just a really crappy one (not even qHD I think).

 

[ponyo]

Umm because the Streak Is a phone.

If 7 inch Streak is a phone, so is my 7" Galaxy Tab.

7" Dell Streak has 800x480 resolution. Just like cheap Chinese tablets. And Tmobile and Dell wonder why the crap didn't sell with required 2 yr data contract.

 

[zerocool84]

If 7 inch Streak is a phone, so is my 7" Galaxy Tab.

7" Dell Streak has 800x480 resolution. Just like cheap Chinese tablets. And Tmobile and Dell wonder why the crap didn't sell with required 2 yr data contract.

If he was talking about the newer Streak 7 which really is a tablet, not just a big phone. My mistake then.