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The iPad is Like the iPod, Not the iPhone

Ben Thompson has written a great analysis of the differences between the phone market and the tablet market, highlighting many similarities with the music player market:

  • The iPhone requires carriers; the iPod and iPad don't
  • iPhones are sold through carriers; iPods and iPads are sold through retail
  • iPhones are sold at a subsidized price; iPods and iPads are sold at full price
  • iPhones have limited distribution; iPods and iPads are available everywhere
  • iPhones are part of an indispensible product group; iPods and iPads are luxury items
  • There is only one iPhone; iPods and iPads are product families

The importance of these points cannot be understated, however Ben also notes one critical difference between the tablet market and the music player market:

While the iPod faced its share of low-priced knock-offs, its brand-name competitors had the same business model as Apple – i.e. selling hardware for a profit... While that is the case for Samsung, it’s not true for Google’s Nexus 7 and the aforementioned (Kindle) Fire.

For structural reasons, Apple can’t and won’t match Google and Amazon pricing, but I believe they will be more aggressive than most people expect with this year’s upgrade cycle.