17 lines
5.9 KiB
Plaintext
17 lines
5.9 KiB
Plaintext
The strategy behind the Nexus 7
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<p>The Nexus 7 I ordered for my wife last week arrived two days ago. That’s been enough time for Cathy and me to look it over closely and get a good feel for its capabilities. It’s a very interesting device not just for what it does but what it doesn’t do. There’s a strategy here, and as usual I think Google is playing a longer game than people looking at this product in isolation understand.</p>
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<p><span id="more-4472"></span></p>
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<p>The Nexus 7 seems to me to be very obviously designed to be an inexpensive web terminal for use with home and small-business WiFi networks. Look at what’s missing: cellular modem, rear-facing camera, SD card. These are exactly the things you’d want in a road-warrior device intended to compete both at the high end of the cellphone market and against notebook/netbook PCs at their low end.</p>
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<p>That having been said, the Nexus 7 does the limited job it’s designed for extremely well. It’s easy to configure, easy to use, and the audiovisual presentation is slick without being gratuitously flashy. We found the voice-search capability particularly effective and well integrated. We were able to watch a movie at our kitchen table (<cite>The Black Shield of Falworth</cite>, a classic piece of 1950s swashbuckler cheese) without lag, artifacts, or dropouts.</p>
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<p>The device is selling like crazy and has spectacular buzz. After I had already privately decided to get Cathy one, Linus Torvalds gave it a public thumbs-up and I got completely unsolicited “buy one now!” raves from two friends of mine not previously noted for anything but jaded cynicism about the consumer-electronics gadget of the week. It is clear that Google and Asus have a mega-hit on their hands – analysts are already describing it as the Kindle-killer and I think there’s no hype at all in that assessment.</p>
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<p>The really interesting question about the Nexus 7 is why it’s not a more ambitious device. It’s clear from looking at the components that Asus could have built a full-featured tablet that could compete head-to-head with the iPad 3, had Google wanted that; the obvious inference is that Google <em>didn’t</em> want it. Which is interesting and revealing.</p>
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<p>What the Nexus 7 looks like to me is that it was designed to meet a specified price point rather than a specified feature set. It’s what you’d come up with if you told the engineering team “It’s gotta retail under $250 with tax and shipping – start with your dream tablet, cut out features that won’t fit that budget, and give me the best device that fits a plausible use case. Then we’ll design the marketing around that.” </p>
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<p>What kind of product and market strategy does this fit? I don’t think that’s complicated. This is also exactly what you’d do if your goal were to disrupt the iPad’s market from the low end. You’d identify a large class of potential iPad customers and target their use case (home and small-business web terminal) with a device that’s a substantially better value for the dollar. The goal would be to play for the highest-volume segment of the market in order to put downward pressure on the iPad’s growth rate without challenging it directly, the latter being something Asus/Google may not be able to do yet.</p>
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<p>Thus: IPS display nearly as good as the iPad’s (216ppi to 264pp). A replaceable battery, and a case with clip closures rather than glue. Google wants any random PC shop to be able to service this thing; it’s part of the value proposition. That aspect of the design also says to me that it’s aimed at low-cost fleet deployments. Certainly if I were a Fortune 500 IT manager I’d look hard at it as a way to lower my whole-lifecycle costs.</p>
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<p>My prediction is testable. If it’s correct, the Nexus 7 won’t be a one-off. Within four months or so we’ll see a followon that ramps up the pressure – probably a 9-inch screen, possibly SD card support, and (crucially) price point no higher. I don’t think, along this line of attack, we’ll see a cellular modem being added any time soon; it’s in Google’s interest to avoid conflict with its smartphone partners, who have been doing a good job of pushing Android – that is, as opposed to its tablet partners who’ve been doing a relatively crappy one.</p>
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<p>Remember Google’s long game. For Google’s advertising and content businesses to flourish, Google needs web access (and especially mobile web access) to be thoroughly commoditized, with nobody else in a position to collect rent on the path to your eyeballs. This is why they don’t need to make a dime of licensing income on Android – it’s a strategic play to prevent rent-seeking.</p>
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<p>The design and positioning of the Nexus 7 is perfectly consistent with this goal. It’s a patient, well-thought-out play that will amortize fixed costs for other firms in Google’s partner network (Asus, Tegra, whoever’s ODMing the display) so that follow-on devices can issue at the same or a lower price point.</p>
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<p>That result will be good for everybody. I don’t think I really need to tell the open-source community to get behind this product and push it, because the buzz says that’s already happening. It’s not the iPad-killer, but the road forward to something that will be is not difficult to discern.</p>
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<p>UPDATE: <a href="https://plus.google.com/u/0/103483555539158593557/posts/TvDAo3dJBGZ">Cathy’s thoughts on the device</a></p>
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<p>UPDATE2: Contrary to myth, Tony Curtis does not at any point in <cite>The Black Shield of Falworth</cite> say “Yonder lies the castle of my fadda da king.” His New York accent is, however, hilariously obtrusive throughout the movie.</p>
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