[Discuss] Google's Nexus 7

[Richard Pieri]

On 7/12/2012 7:39 PM, Dan Ritter wrote:
> Now look at the group of people who would like a tablet, but
> can't justify $400 or $500 at all. Quite a few can justify $200,
> especially at the holiday season with a bunch of geeky friends
> who have been raving about the good cheap tablets all fall.

I had something about Kindle Fire and Nook Tablet here, but you made a 
very important point that I think is better to address: "but can't 
justify $400 or $500 at all".

Go back to how I describe iPad.  It's a media shopping appliance.  The 
big revenue isn't the devices.  It's the 30% that Apple takes on every 
app, every movie and TV show, every book and every song sold.  Apple and 
iOS are very, very good at separating consumers from their disposable 
income.  It prints money.

A consumer who can't afford a premium tablet doesn't have much 
disposable income.  The media shopping appliance isn't something that he 
can afford so the mindset behind the purchase is very different.  He 
doesn't see the "necessity" of such a thing.

All of which is a very convoluted way of saying that iPad is a toy for 
the wealthy and the well-off.  This is why trying to sell iPad-like 
devices to the rest of us doesn't work.  We're simply not interested in 
dropping $200-$300 on a device that exists to make it easy and 
convenient for the vendor to soak up what little we have left.

The game changes once you get the price down to around $150.  That's one 
of the sweet spots for consumer electronics.  Get the price down to that 
point and you have a shot at sustained middle class buy-in.  But you 
still need a product that they want to buy.

-- 
Rich P.