Saturday, March 19, 2011

Will iPad Market Develop on iPod or iPhone Model?

It matters a great deal, at least for device manufacturers and the application ecosystems that grow up around devices, whether the tablet market develops on the model of what happened with MP3 players, or whether it develops on the model of smartphones. In the former case, one manufacturer, Apple, simply wound up with complete domination. In the latter market, robust competition remains the case.

One might argue, despite the early going, that the iPad market will develop more along the lines of the iPhone business, and the earlier PC business, than that of the MP-3 device market. As important as the MP-3 player is, it is a niche product. The tablet, though, points to the future of computing, at least in part. It is a multi-function device, not a single-purpose device, as are MP-3 players.

Multi-function devices arguably are more important, to more industry interests and segments, precisely because they are platforms for many applications and services, from gaming and video entertainment to web surfing and communications. There is, in other words, a strategic interest on the part of the content and application side of the business to avoid monopoly control by a single manufacturer or platform provider. That almost ensures a determined effort by other ecosystem players to cultivate and support a strong rival to Apple in the tablet arena.

The alternatives have be more than functional. The alternatives must offer an experience to match the iPad in most respects. But any important multi-function device will be important to many powerful interests that will have no interest in bending to control by any other single firm. For that reason, assuming the rest of the ecosystem continues to innovate rapidly, the tablet market should develop more on the pattern of the smartphone market, not the MP-3 market.

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