The smartphone market is not a place to be caught in the middle. The most successful companies are working either at the ‘high volume with low price’ budget end of the market, or the ‘lower volume with higher price’ luxury end. Companies such as Sony and HTC have found themselves stuck in the middle of the market, and are struggling to turn a profit.
The same is happening in the tablet market. There was a point when tablets filled every space in the portfolio, and consumers were spoilt for choice, but over time the market separated like oil and water. With the upcoming launch of the 12.9 inch screened iPad Pro, Apple is ready to play the high price market, comfortable in the decision to sacrifice market share for profit and influence.
When tablets first arrived, the mobile computing landscape was naturally different than today . The prominent factors of mobility were a reliance on laptops to do significant portable computing tasks, and smartphones that generally sat around the four-inch display mark for communication and connectivity. Going from these to a nine- or ten- inch screen that the first generation tablets generally shipped with (including the original iPad) and the unique advantages in portability and screen size that a tablet could offer were clear.
Over time the biggest differentiators with a smartphone has been reduced. Screens grew larger with every annual flagship smartphone update pushing the diagonal size closer and closer to tablet territory. Thanks to the rising popularity of the phablet form factor, and the increased flexibility and ability to use a smartphone as the ‘main’ portable computer, desire for tablets fell.
That’s not to say that tablets did not have a place in the market. As devices for consumption, primarily video, it’s hard to argue that a tablet is not the best choice. But many of the reasons that made sense to buy one of those first tablets are now better served by the ‘regular’ smartphone.
As for the tablet’s main use in 2015 – media consumption – you don’t need cutting edge specifications to watch a video file or read an ebook. There’s enough power in older designs and previous iterations of every manufacturer’s tablet to handle these tasks. That tablets continued to work after many years of service likely contributed to the longer replacement cycle experienced by the tablet industry compared to its smartphone brethren.
And if your specifications are no longer required to be cutting edge, then manufacturers are going to be fighting on cheaper components and lower prices, diminishing the potential for creativity and dooming the tablet to stay inside that media consumption space.
If you think that echoes the race to the bottom in the Android smartphone market, you would be right.
So where does that leave the tablet market? Well, just like the smartphone market, the answer is in the two different areas. Android tablets are doing their best to fill the low-end of the market, which leaves the top end of the market open for innovation and inventiveness. Which is where the iPad Pro is likely to come in.
Apple’s next tablet is expected to have a number of substantive changes over previous models. The screen size is looking to be a monster 12.9 inches, the addition of Force Touch to the UI will allow for easier access to more options and settings when using applications, and the rumoured use of a digital stylus will aid the creative process on the large screen.
It’s also likely to have a hefty price, comfortably more than will be asked for the rumored updates to the iPad Mini and iPad Air.
While Android smartphones command the majority of market share (around 82%) much of that success is built around low margin devices. Apple’s iPhone may not have the overall numbers, but it commands far more profit per handset and sets up Apple to gain much of the profit from the smartphone ecosystem.
If Tim Cook and the team at Cupertino can perform the same strategic manoeuvres in the tablet space by creating a high-end device such as the iPad Pro, it can draw out the bulk of the profits from the tablet ecosystem and leave the brutal low margin / high volume commodity play to every other manufacturer.
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