With Apple looking like it’s going to launch a 7-inch tablet, it’s hard not to see that form factor gaining a lot more traction. My surveys tell me that enterprises prefer that layout for many of their mobile-worker applications because it’s easier to carry and because most of these apps involve displaying something for on-site review based on a few keystrokes. As far as consumers are concerned, the big thing seems to be cost—the 7-inch model is cheaper and it lets players like Apple go down-market without discounting their premier line. But is that all?
Amazon, since the launch of the Kindle Fire, has been the major player in the 7-inch space, and Google’s Nexus 7 clearly aims as much to hit Amazon as to miss the traditional Apple iPad niche. Apple’s response, if true, would be effectively a punch at Google to be sure, but also at Amazon. So what’s up here in the 7-inch space? You guessed it; I think it’s cloud ambitions.
If you’re going after the mass market you need to have a cheap product, which either means you have thin profits overall or that you find ancillary profit sources as follow-ons to the tablet buy. Amazon (and B&N) get their primary profit from sales of ebooks to the customers who have their reader. Google or Apple, entering the 7-inch space, are going to have to draw on some form of cloud service like ebooks or they’ll never be able to both compete in price and generate margins overall.
Tablets push cloud, but not the most general cloud model—at least not so far. Most tablets are WiFi and are used to do something that needs more screen real estate, so e-reading is a good example. Content is clearly another, which is why Kindle Fire draws on Amazon’s library of video. Google has revamped its whole Android store vision to support a stronger channel of content delivery to devices. Apple, of course, already has a store. And store changes aren’t over yet, because Google and presumably Apple will bring a new dimension to 7-inch e-reader form factors—multiple ebook clients. That may push everyone to expand services.
Amazon doesn’t support alternative ebook libraries on Kindle. Google does, effectively, on Nexus 7, and Apple likely will if it launches a 7-inch tablet. For Apple and Google, the move is essential because they need to be able to support the growing ebook market, but for Amazon this is bad news because it means that they either have to open their own device or risk users will fly to a more general tablet to get access to all the ebook conduits. I read both B&N and Amazon on my tablet, and I’m sure many people do the same. With this shift, the ebook subsidies are at risk, which pushes the Amazons and B&Ns of the world more to a generalized model of a tablet as a content receiver, which then pushes them more to a cloud model.
Amazon may be launching its own smartphone, say the rumors. That’s very possible, I think, and if they do then I think it’s also going to put pressure on Apple and Google to raise the bar again. Maybe to become MVNOs? It will also pressure operators to support the Mozilla Firefox OS and cloud-hosted, HTML5-authored, apps and features. In short, we’re looking at a major sea change in appliances, and it’s going to bring changes not only to the gadgets in our hands but to the servers and storage and networks that support them.