Jeff, I'm in total agreement with your thoughts.
Taym, the tablet market is not really like the console market and a number of important differences make the loss-leader strategy an entirely different beast especially. Consoles have a product cycle of at least 5 years - that's a significant amount of time to amortize development and to lower BOM costs. Tablets are refreshed every 6 months to a year, constantly pushing the fringe of current technology.
Of course, but not my point. What I mean is: just like consoles, you (=most people today buying tablets, that is not somebody who would be on this board)don't buy a tablet, or I should say the iPad, becouse of its inherent technical feature set, but because of the Apps and Games available, and also very very much because of peer pressure, and other social factors (which I mentioned in my previous post). So it is crucial to create a social dimention to a platform, which explains the attept - assuming the $199 is real - to just bring millions of units in the market to begin with. You need to get a tablet in those people's hands.
Once you succeed in making your platform popular enough, then the ecosystem is there. There does not need to be a Surface2 at $199. Depending on how successful they are with this strategy, this approach may actually make a lot of sense.
As far as the "irrelevant minority" purchasing tablets...
No, no, the "irrelevant minority" is that of those buing tablets
because of what the tablets can do versus those who buy them for other reasons which I listed before, most times not knowing at all what the iPad can or cannot do. Please, read my post again if you wish and sorry if I wasn't clear. My English may be failing me as it happens.
Previous Topic
Index
