I’ve been playing with the Nexus 7 for most of the weekend and it is a very different beast than the iPad. I actually think it is a more useful form factor, but then I’ve been using the Kindle Fire for some time. I’ll carry it while I won’t carry a 10” tablet, because it’s just easier to hold and it’ll fit in a pocket, making it much less likely I’ll drop or forget it.
I should point out that my wife is on her 3rd Kindle Fire and has never lost an iPad, but that’s largely because the iPad stays home and the Fire travels with her.
The real battle, however, will be when the second generation Kindle Fire comes out next month and the Nexus 7 is likely a good example of what the new Kindle’s will bring to the table.
Graphics and Gaming
The Nexus 7 is a showcase for NVIDIA’s Tegra 3 platform and that makes it vastly better for gaming than the first generation Kindle. What you’ll find, particularly when taken against the iPad, is that the 7” form factor is substantially better for gaming because it is smaller and easier to use as a controller. In fact, with the Nexus 7 you can quickly see that it would be far better long term than most of the hand held gaming systems with one exception and that is the speed and accuracy of on-screen controls. These are improved with the Nexus 7 but still not as good as real physical buttons are. I’m not expecting the current generation of tablets until the Windows Surface Tablets ship to fix this. The Surface tablets will have a more advanced touch interface that should be faster and more reliable but they are also expected to come in 10” sizes rather than 7” so won’t be ideal for the same class of games initially. (At some point Microsoft will need to more aggressively get ahead of this curve).
But gaming and reading is where the 7” class stands out and the Nexus 7 is in line with reading and far ahead of the 1st generation Kindle Fire in gaming power and performance. Since the Kindle is primarily a reader/web product the new line (5 products expected both with and without 4G wireless, an entry version with the old screen, premium version with retina like screen, and 10” version) may lag on performance because Amazon has not been aggressive with gaming. At least not yet. They have been and will continue to be aggressive on price.
Size and Weight
The Nexus 7, like the coming Kindles, is both lighter and thinner and while the weight isn’t that noticeable the size is and the Nexus is far more comfortable to hold. I expect the new Kindles (at least the ones above entry price) will match it in both categories as will the anticipated 7” iPad. Thin is in and the Nexus 7 currently matches the 7” market leading (in terms of technology not sales) Samsung 7.7 which is most likely closer to what the premium 7” Kindle will look like in use.
The user interface on the Kindle is, and will likely remain; to be easier to use than the Android interface and the Android Kindle app lags that on the Kindle which will likely keep readers more loyal to Amazon. The latest Android interface is clearly an improvement but not a revolutionary one and it appears Google is getting stuck as Microsoft and Apple did with being afraid to make sweeping UI changes for fear of confusing existing customers. Amazon likely has the same problem but they started out, as Microsoft did with Windows Phone 7, with a more advanced UI. But the number of customers Microsoft still lost going to Windows Phone 7 showcases what the risk of any change in UI has become. This will likely keep folks who know Android closer to the Nexus line and products and those that know the Kindle Fire with that updated line as well, but new users to both will likely continue to prefer Amazon if given the choice.
There are two big takeaways, one is that 7” tablets clearly have now become acceptable and that they are progressing (thinner, lighter, with better displays) like their larger cousins did. The second one is that one size likely doesn’t fit all which makes it critical that Apple get a product in this class or they will bleed share and that having products in both the 7” and 10” categories like Samsung does and Amazon will, is likely also critical for market dominance. This also points to why Samsung is probably the most likely vendor in their class (Amazon is still primarily a retailer) to take Apple out.
Finally, given the 4th quarter is about gifts and $200 is a whole lot easier to see on a January credit card statement than $500-$800 for an iPad (depending on configuration) I expect the 7” products to eclipse the 10” products in a 4th quarter perhaps even this one. This shifts the battle for both Microsoft and Apple, and whichever of these vendors doesn’t have a timely solution is likely to be pummeled.
President and Principal Analyst, Enderle Group
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