Tuesday, May 17, 2011

ASUS/Nook/More On Differentiation

The interior of the Barnes & Noble located at ...Image via Wikipedia
Last time I continued my seemingly never ending dialog on the topic of differentiation and how I think companies should compete with Apple's iPad by mentioning the ASUS Eee Pad Transformer TF101. To recap briefly, the Transformer is a 10.1 inch tablet. The 16G version goes for $400 and the optional keyboard is another $150. So, for $50 more than the base iPad you can have a higher resolution display and a keyboard. The optional keyboard adds additional battery life and transforms the Eee Pad from primarily a consumer of content to a decent producer.

The key here is that ASUS is offering a product that is cheaper than Apples iPad and has a significant upgrade available with the optional keyboard. This is how you compete with a company like Apple and a product like the iPad.

Another company that has the right idea is Barnes & Noble. with their color Nook. I'm not a fan on non E-Ink book readers but with the recent Android 2.2 upgrade the color Nook has a lot to offer. At $250 it's half the price of the iPad and offers many of the basics people want in a Tablet with Email, web browsing and a very stripped down app store.

Both of these products differentiate themselves on price and features while providing what seems like a clear value proposition to potential buyers.

It's easy to point out a company that doesn't seem to get it. RIM, maker of the until recently beloved Blackberry smart phones fumbled badly with the Playbook. The device is significantly smaller than an iPad which isn't necessarily a bad thing but the base model (16GB, WiFi Only) costs exactly the same as an iPad. Really? For a 7 inch display?

I suspect the thinking in regards to pricing on the Playbook was that RIM is a premium brand and they can't be seen as competing with Apple on price. If so, fair enough but they aren't competitive on features either. That is not a good combination. A price point $50 below Apples would have acknowledged this without making the Playbook seem "cheap".  At $100 less I'd have given it serious consideration if I were in the market right now. I'm only one data point of course but at some level these are the kinds of evaluations that go on in peoples heads when they are in the market for a particular product and exploring their options.

Clearly it is possible to compete with Apple. Google has been very effective with their Android operating system in the smart phone space. Both Android and iOS offer similar user experiences but they are significantly different in ways that differentiate them from each other. I may write more on this in the future. Right now it's time to get prepared for my day job.
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