I read a couple of really interesting articles in The Washington Post this morning about the most recent wave of tablet releases and their effect on the national "electronics market." They got me thinking about how truly fascinating the economics of the electronics industry is and I started asking myself:
- To what extent does competition help or hurt the electronics industry?
- What does it take to change the dynamic within the electronics industry?
- What keeps consumers going back for more?
That could be changing, though, and this brings me to my second question. The articles I read this morning postulate that the emerging key to shaking things up on the tablet scene is the introduction of the so-called "mini-tablets," like Amazon's new Kindle Fire and Barnes & Noble's Nook Tablet. According to one article, these devices are capable of doing about 80% of what the iPad is capable of for roughly 50% of the cost, offering lower-spending tablet cravers a more viable option. Suddenly, the devices being pitted against each other aren't so alike (certainly the differences in hardware and operating systems differ greatly between a device like the Kindle Fire and the iPad). This makes the choice for consumers more difficult and puts price at the forefront once again, reestablishing some competitive balance to the market. It takes something revolutionary, yet still directly competitive with existing products to change the dynamic. Technology writers are predicting that Amazon may have just the revolutionary product needed.
Finally, what keeps consumers going back for more? It is that tantalizing draw that I confessed to being a magnet for at the beginning of my post. The nature of the electronics market is that it is in a state of constant evolution; each new product has only a fleeting moment in the spotlight before it is out-shined by a newer, even better model. The industry benefits greatly from a media advertising culture that tells us we have to own the best or else we are behind the times. To upgrade your products is the only way to stay ahead. That's the true for the developers of these products; why shouldn't it be true for consumers as well?
Wow, this post ended up being longer than I intended, so I'll wrap it up. But I think it would be really interesting to look more into the electronic market phenomenon by examining some numbers from economists. How obsessed are we? What percentage of our economy is dependent upon the success of these sales? What effect does the introduction of new products have on the behind-the scenes folks, such as software writers? All interesting questions that would be fun to answer at a later date. For now, I think I will go check out the Kindle Fire...
Here are the two WP articles. This one is about mini-tablets shaking up the market:
http://www.washingtonpost.com/business/technology/nook-tablet-amazon-kindle-fire-mini-tablets-will-shake-up-market/2011/11/09/gIQAjK5d6M_story.html?hpid=z5
And this one is more of a profile on the Kindle Fire, to give you some perspective on how it will compete with iPad:
http://www.washingtonpost.com/business/economy/amazons-kindle-fire-sets-the-stage-for-major-disrpution-in-tablet-space/2011/09/28/gIQAgotC5K_story.html
I enjoyed your blog and reading the linked articles! I am an avid Apple fan and though I don’t have an iPad, I can easily identify with your interest in the “latest and the greatest” I think your argument about why the iPad is so popular is very valid, and that too much competition may hinder the electronics industry. Apple is a trusted company that people would be more likely to do business with if products were relatively comparable in features and price. Unfortunately for Apple, the introductions of these low-priced tablets and mini tablets may start to create competition that they have not experienced until now. The main question is how much will customers be willing to sacrifice the supreme features on the iPad with the features of lower-end tablets. The iPad is unquestionably the best device in the tablet industry, and other tablets still have much to deliver in order to match its quality and performance. However, in the end price will dictate if customers are willing to pay $500 for an entry level iPad, or $80 for another tablet with similar features.
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