The tablet effect
Tablets bring mobile video back; Kindle Fire puts content front-and-center
Tablets represent another playground for apps developers to come up with new apps that work better on a bigger tablet screen than on a smartphone, particularly video apps. A recent In-Stat study found that half of tablet owners use them to watch TV shows and feature-length films. That figure will pass 85% in five years, at which time nearly 60% of smartphone/tablet owners will also be viewing over-the-top video at home, says In-Stat research director Keith Nissen.
"Tablets, in particular, have become a primary video device, both inside and outside the home," Nissen said in a research note, though he adds that doesn't mean users will stop watching videos on smartphones. In fact, they'll expect to access video content across all devices, including the living room TV set.
"As these devices become a center-point for video engagement and consumption, content providers, device manufacturers, and operators need to support a multiscreen usage model that reflects social interaction, screen interaction, personalization, and mobility."
Unsurprisingly, the iPad remains the king of the tablet hill, with other tablet vendors struggling to match Apple's ecosystem, although Android collectively has taken 20% of the tablet market from Apple in the past year.
The latest tablet to generate "iPad-killer" hype is Amazon's Kindle Fire, unveiled in late September. In terms of hardware, the Kindle Fire is more of a challenge to the Barnes & Noble Nook e-reader than the iPad, but the real attraction and potential game-changer is the Fire's integrated content experience - specifically, all of the content and services (including its Prime service, which includes streamed movies and free shipping) that Amazon already sells, which is also what allows Amazon to sell the Kindle Fire for an enticing $199.
"Amazon's retail-based business model allows the company to subsidize the device on the premise that consumers will buy more from Amazon, be that physical goods or its digital content," says Ovum practice leader Adam Leach. "This model is the direct inverse of Apple's model; Amazon is selling a device in order to sell more content where as Apple sells content in order to sell more devices."
And if the Fire does well, observed Rethink Research director Caroline Gabriel in a research note, "Amazon is likely to move more directly into the iPad's."
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