The Start of the 7-Inch Tablet Showdown

Google gets rolling by promoting the Nexus-7 on its homepage

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The Start of the 7-Inch Tablet Showdown

New Customers

A good chunk of the people who would fork out the money for a full-sized tablet already have. It sounds funny saying this after only three years, but this is a mature market. The big rush of early adopters is over and now it’s a steady stream of new customers, supplemented by existing tablet owners that manufacturers can convince to upgrade to the latest and greatest.

Price

7-inch tablets priced in the $200 to $300 range are at that sweet spot where holdouts from the pricier iPads may be willing to jump on the bandwagon. They’re also inexpensive enough that parents may begin buying them for kids en masse, especially when they do the math and realize that a $200 Nexus is only $50 more than a Nintendo 3DS, plays games that cost a buck (compared to $30 cartridges), has a battery that lasts twice as long, doubles as a movie player and can be used for basic schoolwork such as research or writing short essays.

Size

Full-sized tablets such as the iPad are great, but lots of people are put off by the size. Let’s face it, an iPad isn’t exactly pocketable. A good quality tablet in a 7-inch form factor is liable to bring on a fresh wave of adopters who have avoided tablets because of their bulk. Expect many gadget hounds to add a smaller model to their existing iPad as well, to give them a portable option.

Awareness

Google has fired the first shot with its prominent promotion of the Nexus 7 and you can expect Amazon to do the same with a new Kindle Fire. In fact, Amazon isn’t sitting still in the meantime — I found a press release from the company in my inbox this morning announcing that the Kindle Fire is now “sold out” and trumpeting the fact that the device captured 22% of U.S. tablet sales in the nine months since its launch.

The building buzz over the iPad Mini (with a rumored October announcement date) is going to make it impossible to ignore these things. The inevitable lineups at Apple Stores will be all over the news and once all three are “real” and available and being compared, it’s going to be impossible to avoid the bombardment of reviews and advertising.

So expect this Christmas to be the “year of the small tablet.” Whether Apple, Amazon or Google comes out on top depends on a number of factors, but Google’s Nexus 7 has a head start, positive press, a likely price advantage and full access to Google Play. I expect it’s going to easily clear those 6 million to 8 million units that analysts are predicting.

And while the Nexus 7 won’t directly goose Google’s bottom line if that’s the case, it will still establish a user base that contributes revenue over time through Google Play purchases.

As of this writing, Brad Moon didn’t own any securities mentioned here.


Article printed from InvestorPlace Media, http://investorplace.com/2012/08/the-start-of-the-7-inch-tablet-showdown/.

©2014 InvestorPlace Media, LLC

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