It's Not Only About The Apps

Online pundit Robert Scoble seems pretty convinced that smartphones are all about apps. Actually, what Scoble is saying is not new, it is the same mantra that existed for personal computing. It’s not really about quantity of apps or quality of apps, its about what platform developers chose for creating their apps.

But apps are not a guarantee that a platform will succeed. I am surprised that nobody has been talking about what is the killer app for smartphones or tablets. A killer app is that thing that compels someone to buy a computing device no matter what the price, because they have got to have it. There are several candidates for the killer app for smartphones, but I don’t think the same thing can be said about tablets.

So, what is the absolutely worst thing companies trying to develop a new platform can do if there is no killer app for the platform? The obvious answer is make the price of the hardware for the platform too high, and this is what we are starting to see with tablets. Motorola has announced the pricing for the Xoom at between $599 and $799, depending on the model, and word is that the LG Tablet will have a $1350 price tag.

The prices for the Motorola and LG tablets are too high to compete with Apple’s $499 price tag, and since the Motorola and LG tablets don’t have a killer app, there is no justification to pay the higher price, unless you absolutely dislike Apple. Granted, the $599 Xoom, which only has WiFi and has 32 GB of RAM is the same price as the 32 GB, WiFi-only iPad, but we also know that the cheaper $499 iPad is the top seller of the iPad line. My opinion is that people find enough functionality in the iPad to justify the $499 price, but I am not certain they are willing to pay more for what is arguably the same device. Frankly, while a lot of people have bought iPads, I think there are a lot of people waiting for the prices to come down.

Until the market finds the killer app for tablets, it is going to be a price sensitive market, no matter how many apps are available. The current trend I see with the price of tablets has me agreeing with James Kendrick that the prices may kill the Android tablets before they even make it to market. In the mean time, Apple is going to announce the iPad 2 some time soon, and if Apple keeps selling the WiFi + 16 GB “original” at $399, and introduces 32, 64, and 128 GB iPad 2 models at the current pricing, it is going to very difficult for any other tablet brand to compete if they don’t meet those prices.