So far June is showing itself to be a news-filled month for tablet announcements. Microsoft announced it is entering the hardware space once again with the Microsoft Surface tablets. Available in both ARM and x86 architectures, the devices will bridge the gap between tablets and ultrabooks and unify the Windows experience across all mobile devices. Today Google announced the Nexus 7 as well as the Nexus Q and some updates to Google Play. Add to these rumblings in the blogosphere about Amazon’s next Kindle Fire and we have the making of an action packed, exciting summer tablet season!

Google is partnering with Asus for its first Nexus Tablet, the Nexus 7 (pictured below). The Nexus smartphones have typically been high-end, best of breed devices aimed at competing with the iPhone while showing off an unaltered Android OS.  For full disclosure, I own the Galaxy Nexus and am thrilled with most aspects of the device so there does exist potential for a slight personal bias. But for the tablet, Google addressed the low tier with a $199 7” device. Google is clearly subsidizing a good chunk of the costs as Amazon did with the Fire with expectations to make the money back in content.

Despite its lower price it still has fairly impressive specs including 1280x800 resolution, Tegra 3 chipset, HDMI out, and weighs just 340 grams. It will also be running Android 4.1, referred to as “Jelly Bean.” Most importantly, battery life is on par with competitors at 9 hours. The Nexus Q, an Android computer for the home, was also introduced and looks to be a huge step for Google in entering the living room, growing the importance of its cloud solutions, and a better way to get onto the TV than its previous attempt with Logitech.

It appears as though Google is not replicating its Nexus smartphone strategy with the Nexus 7. Instead of focusing on the premium 10" market segment, it is going for the lower end 7” market segment. This is due to two factors: 1. Competing with Apple in the 10” segment has shown to be difficult at best. 2. The lower-end 7” segment offers a much larger opportunity for growth regardless of whether or not Apple comes out with a smaller 7” device as the 7" iPad will likely retail for a considerable amount more than the Nexus 7.  Furthermore, we see the low end of the market growing significantly more than the premium tier.  (For further information, please see our Forecast by ASP due out later this week).  There are only a handful of 7” devices with any significant traction and the Kindle Fire, one of the most popular devices in this segment, is only currently available in the US, greatly limiting its addressable market. The Nexus 7 will have much broader availability, giving Google a strong advantage in terms of global market share and therefor greater economies of scale. They also have economies of scope with their roots in the OS as well as experience in the smartphone market.

Google Play has also been updated with Magazines, Movies, and TV shows. The amount of media available on Google Play is tremendous and I believe Google needs to make a strong advertising campaign in order to get this across to consumers to overcome some of the stumbling blocks it had earlier along with the confusing recent name change.

Amazon is also rumored to have an upcoming announcement for the latest iteration of the Kindle tablet. There are many who believe this will be the previously talked about “Hollywood” tablet, a 10” device that will most likely be similar build quality to the Kindle Fire. It would likely need to retail at a significant discount to the iPad’s $499 intro price point in order to gain any traction. The other is possibility is that Amazon decides to upgrade its current form factor with improved specs and build quality and remain focused on the $200 price point. I believe this would be the better move for Amazon as it will have more success competing against Google at a similar price point than Apple at even a $100 discount.

Amazon continues to have a strong library of content but Google is quickly building its arsenal of eBooks as well as music, movies, and TV shows. For now, Amazon may continue to have an edge in content, if not in actual numbers, at least in consumer awareness. Google will most likely have an advantage in terms of hardware specs and build quality. Both companies offer a cloud storage service that will play a stronger role as the market develops, however, Google’s position is stronger as it operates across all devices, enabling a more consistent and unified experience from smartphone to tablet to desktop, a position that is furthered by the introduction of the Nexus Q.

So how will this play out? Amazon displayed an impressive level of sales in its first quarter in the tablet market but the enthusiasm for the device seems to have lost its flame. When Google partners with OEMs to manufacture its Nexus devices, they have historically been top quality and relatively successful devices. However, this time Google is changing its strategy a bit and clearly going for more quantity and market share. How well Google does depends not only on how well they continue to build out their ecosystem of eBooks and multimedia but also how well they market it. To date it has not been marketed well and the usability of the store falls quite a bit short of iTunes or even Amazon. I believe Google will have an advantage due to their hardware but only time will tell if they can gain traction with Google Play.

See Related Tablet Reports:

http://www.strategyanalytics.com/default.aspx?mod=reportabstractviewer&a0=7483

http://www.strategyanalytics.com/default.aspx?mod=reportabstractviewer&a0=7405

See Related Content Reports:

http://www.strategyanalytics.com/default.aspx?mod=reportabstractviewer&a0=7493

http://www.strategyanalytics.com/default.aspx?mod=reportabstractviewer&a0=7459

With all the hype surrounding tomorrow's big announcement from Apple, mention of a potential Nexus-branded tablet circulating the web have garnered little attention.

As someone who is a huge fan of the Nexus lineup and a happy Galaxy Nexus owner, I am very excited to see what Google and Asus, or whomever they end up partnering with, produces (as with smartphones, it will likely change from year to year).  Having the weight of Google behind a tablet OEM would be an additional tailwind for an already rapidly growing OS.  (see our report: Global Tablet OS Market Share: Q4 2011 and stay tuned for our upcoming Tablet Regional Forecast by OS.) 

All devices in the Nexus lineup have incorporated top of the line components, build quality, and beautiful form factors.  This is why I have to deviate from some of the hypotheses that it will be a low-cost, 7" device aimed at competing with Amazon's Kindle Fire.  First of all, Google does not need to significantly subsidize device hardware when the Android OS is growing so rapidly.  Second, the Nexus lineup has to date been a best of breed device.  I see the Nexus lineup more as an Android flagship device meant to go head-to-head with the iPhone while simultaneously building the Android brand and encouraging OEM support.  What Google needs is a premium device that can tap into the companion segment as well as the catch-up TV segment to boost its share of Android users and be a clarion call for other Android tablets to pursue higher specs rather than cheaper prices as a way of gaining volume. 

I hope (and believe) they will go for an all-out, top of the line device that challenges what will come out of Cupertino tomorrow. 

Yesterday in Barcelona, ASUS displayed its Padfone, a handset that can transform into a tablet or notebook.  Whether or not this idea actually takes off will depend on a number of factors, including the cost of the accessories required or consumers' willingness to have a tablet that requires their phone to operate.  But the way I see it, this is a tremendous way to solve the problem of multiple data plans.

When deciding on whether or not to buy a cellular-enabled tablet, many consumers are discouraged by the idea of having to pay another monthly data fee.  As we noted in our report Regional Tablet Sales by Connectivity Type: 2010-2015, roughly half of tablet purchasers go with the 3G option.  (On a side-note, we are in the process of updating this report, as we believe the share of 3G capable devices has actually declined.  Keep an eye out for the update in March.)  With the Padfone, consumers do not need to make the decision.  If they need cellular connectivity, they have it available under their current data plan.

The Padfone also has the ability to become a notebook computer with the keyboard docking accessory.  This device actually has the potential to replace three separate computing and communicating tools with essentially one.  Of course you still have three accessories, but they are smaller, more transportable, and (hopefully) less expensive as there is actually only one CPU, which is located in the phone itself.  The phone runs a dual-core 1.5GHz processor with 1GB of RAM, more than enough for most basic computing needs.  Reviews of the build quality have been mixed but generally positive.  Some have noted the handset's lightness creates a cheap feeling although this is necessary in order to prevent the tablet, with phone placed inside, from being too heavy.  Others have noted it was much better than they were anticipating.

So it will be interesting to see if this idea takes off.  I believe much of the success will depend on the prices of the various components, which has yet to be revealed.  Stay tuned for more!

Samsung revealed several new tablets today at Mobile World Congress. The Galaxy Tab 2 (10.1), the Galaxy Tab 2 (7.0), and the Galaxy Note 10.1. With these additions, Samsung has a lineup of three 10.1” devices, three 7”, a 7.7”, and a 8.9”. This is a large number of SKUs for little differentiation. With such little differentiation, I wonder what Samsung’s strategy may be.

The Galaxy Tab 2 (10.1) is not a significant step forward for the Korea manufacturer that has recently been known for its appealing designs. Some would argue it is a step back. The form factor is thicker and the weight a little heavier. These are two factors I personally focus on in my tablet buying decision.

The thicker form factor and heavier weight is due to a slightly larger battery. Although it is clear consumers put a lot of attention on battery life, what is the tradeoff for the extra hour or two? The processor has not changed, nor has the resolution, memory, or really anything else for that matter. The front-facing camera quality has actually decreased from a 2MP camera to a VGA camera.  The one nice upgrade is Android 4.0, but that is something that we would expect on any high-end device at this point.

So then if the processor hasn’t been upgraded from the 1GHz dual-core in the original model and it has actually taken a step back in terms of form-factor, what is Samsung doing? It appears as though they may be addressing another segment of consumers with a lower-priced device. With rumors of Apple coming out with a quad-core iPad 3, it is unlikely Samsung plans to compete head-to-head on the $500 price point. Perhaps these versions will address the largely untapped sub-$450 market.  Our Tablet Regional Sales and Value by Price Tier Forecast: 2010-2015 shows this market is currently only 32.5% of the market but is expected to grow to 64.5% by 2015. 

The Galaxy Note 10.1, on the other hand, appears to be the one focusing on the high-end consumer market.  With a faster, 1.4GHz dual-core processor, multi-screen capability, and the ability to take notes with its stylus, the Galaxy Note 10.1 is definitely a step forward.  It also has the increased battery performance in the original, slim designed package and original 2MP front camera. 

So will Samsung's strategy to bifurcate the high-end and mid-tier market work? Time will tell but right now there are a lot of SKUs with very similar, and not very catchy names. Samsung is giving consumers plenty of choices  but will they be confused?  Isn’t the second generation of a device usually a step up?  The range of sizes is great but I think Samsung needs to clarify their branding strategy.