HP's next tablet is Windows 8

HP's new CEO, Mrs. Whitman, said the next tablet product from HP will use Windows 8.

http://moconews.net/article/419-hps-whitman-were-going-to-make-windows-8-tablets/

Two features caught my attention when I took a look at those Windows 8 introduction videos for the Metro Interface, http://www.youtube.com/watch?v=ihcIlg37QKU and http://www.youtube.com/watch?v=BHrcz7zcm_8. One is the touch area outside the visible part of screen and the other is the support of the original windows interface.  A touch area outside the screen requires the same high density touch sensory to be integrated beyond the viewing portion of display. The desktop Windows user interface requires more memory.  Both add to the BOM cost.  

Based on the iPad 2 3G tear down, the BOM cost is around $326.  This number came with the fact of Apple's own A5 processor and the low memory usage enjoyed by iOS.  A WiFi-only iPad 2 would cost even less. Enough hand-held Windows devices had suffered under-provisioned hardware and failed so far.  HP's decision of adapting Windows 8 will put itself between the choice of higher cost per unit or unsatisfactory user experience.  Mrs. Whitman has one shot on this one.  A decision of using Windows 8 may seem to be a no-brainer.  It may turn out to be an ill-thought decision because it seemed to be such a no-brainer.

Value add

Intel is talking about thin and light PCs, again.
http://www.businessweek.com/news/2011-05-31/intel-seeks-to-challenge-apple-s-ipad-with-new-ultrabook-pcs.html
http://www.zdnet.com/blog/computers/computex-2011-intel-unveils-ultrabook-talks-medfield-tablets/6004

Since 2007, there were Ultra Mobile PC, netbooks, and OLPC (my blogs on UMPC). It was clearly the writing on the wall for the system vendors that the mass market was ready for easy-to-use computing devices. But to Intel and Microsoft, it was just a series of protection measures to delay and deter. Intel gave up StrongARM and kept its low-end CPUs one or two steps behind what the market needed them. Microsoft tried to put a limit on netbooks to under 9-inches upon its OS licensees. Maybe it was important to protect the margin of company's bread-and-butter products. But to end users, those decisions did not add any value to them. In the end, competitors step in and eat their lunch. Companies tried to protect their profit margins by preventing new product categories from happening ended up losing more.

All those decisions must have gone through a lot of deliberation, market data analysis and signatures from layers of directors and VPs in both companies. In the end, the defense looked like being built more along departmental business lines than to the battle front line. If Intel and Microsoft had worked with the trend and all their partners, the market might have been filled with different kind of interesting products than just overwhelming Apple iPad and upcoming Google Android tablets, neither uses Intel processors nor Microsoft OS.

Speaking of surprised development and different revenue sources. A Citi analyst said Microsoft makes five times more income from Android than from Windows Phones, thanks to patent licensing fees.

http://gizmodo.com/5806227/did-you-know-microsoft-makes-five-times-more-money-from-android-than-from-windows-phone

Of course, this is not a development Microsoft would like to see. After all, no company is operating and competing in a vacuum. Market cannibalization is not a complicated concept, but can be so hard to get it right for a big company.

iTablet

There is a huge gap between a laptop and a smart phone. And the gap is getting bigger.

The UMPC is supposed to fill in the gap but it seems very unlikely now. The price point is not right (Sony UMPC or Samsung Q1). It is too slow and the target audience is not clear either. It is like anything can go wrong with the UMPC went wrong.

What is not right about the laptop? Not much actually. It is just a little too big to be carried around all the time, and it costs a little extra outside the comfort zone for every member in a family to own one. For most families, the laptop is used by daddy and mommy to continue working on what is not done in the office or to manage household accounting. It is really used as a workstation. How about a second computer for entertainment and education? A desktop would cost less. But it takes too much space for most homes on this planet, except for those in the North America. Besides, you cannot carry a desktop around. How about a smart phone? No, it just doesn't cut it. The screen and the keyboard are too small. For the foreseeable future, the smart phone will remain as a contingency device.

So we need something cheap with a form factor between a 12-inch-screen laptop and a smart phone. It is a huge gap. It is a product that can have the profit margin falls between that of a laptop PC and a smart phone. This device will be a mobile device for Internet, like a TV set for TV programs and movies. It will be a device for personal email, photo, video, music, instant messaging, learning, and of course, Internet browsing.

Will the TV set become the family Internet device? It is very possible, but it will happen later than the tablet device. It still takes another year or two for the technology to ripe. But it will take a while after that for the price to be palatable. Furthermore, the frequency of replacing TV is slower too.

There are prototypes and products showing up in the market. Take a look at OLPC XO 2.0 and Asus Eee PC. I wonder when Apple will release its "iTablet". It is just a matter of time.