A View from Christopher Mims
Is the iPad Just An Expensive Plaything for the Rich?
Why other tablet makers shouldn’t bet on matching the iPad’s success.
Are you surprised that a device that costs $600 and that, by most accounts, isn’t essential to work or possibly even your entertainment is purchased by people with lots of disposable income who might be inclined to blow that disposable income on other equally useless things (apps)?
Well, some people are – specifically, those who look at how much iPad users buy when they’re not blowing their cash on iPads. To be fair, Yudu media’s analysis of the “Selling power of the iPad” at least quantifies the profligate spending habits of technology’s early adopters.
That’s great, and it’s clear other tablet makers want to capitalize on that market – after all, the Motorola XOOM, which is apparently the best thing in the world (since the iPad), is going to cost $800. But when does this market reach saturation? Tablets are still an unstable category, and it’s not clear that they won’t go the way of netbook sales at some point – especially if they don’t become cheaper.
And that’s where things get interesting. Does a tablet purchased from Walgreens for $100 grant its user the same magic purchasing power as an iPad? Of course not – it’s catering to a completely different demographic. And so, as tablets become democratized, they’ll become no more, or less, lucrative as a mechanism for delivering media or purchasing experiences than the computers they supplant. One of Apple’s secrets is that the app stores for the iPad and to a lesser extent the iPhone / iPod Touch are proprietary walled gardens disproportionately inhabited by the wealthy and/or spendthrift.
Yet for tablets to succeed, they must come down in price: witness the success of Amazon’s Kindle in the wake of the downward revision of its price. Johnny-come-lately tablet makers and everyone who would sell their wares on these devices should be wary of anyone arguing that tablets are necessarily a route to riches: they can be, but only to the extent that they remain a plaything of the economic elite.