While the Kindle Fire clearly has the iPad in its sights, remember that the media tablet market is still in the early stages. And by the end of 2012, there should be a third major player in the field: Microsoft, which in tandem with its many hardware partners will unleash a diverse lineup of tablet devices based on Windows 8. I believe Windows 8 will account for a huge chunk of this market. Here's how it could happen.
I should point out up front that this is purely speculative. With Windows 8, Microsoft is for the first time employing a dual-use strategy whereby its OS will be installed on both traditional, x86/64-based PCs and, for the first time, ARM-based devices. We don't yet know for sure what form those latter devices will take. Most will likely be iPad-like tablets of varying sizes and shapes, yes, but from a software perspective, things are unclear. These devices will not be compatible with the legacy Windows software we all know and use today. But we don't know whether they will be "pure" tablets, offering on the new Metro-style UI and Start screen or whether they will also provide the classic Windows desktop and the cruft that comes along with that.
Rather than assume that Microsoft will simply get it right, I'll instead offer up some initial advice that is either already happening or not happening; we just don't know yet. And that is, ARM-based Windows 8 tablets should be iPad-like devices, not ARM-based PCs. They should eliminate all of the classic Windows UIs and complexities, and offer a true device experience. Users that want the full PC experience can simply choose a traditional x86/x64-based PC, and of course those machines will be diverse enough to include a variety of tablets as well. The important point is that these PCs will be supersets of the ARM-based devices.
Such an approach provides Microsoft (and its partners) with a platform that is a pure play iPad competitor while retaining everything that is good, and right, about the PC. And it gives customers a third major ecosystem to choose from in the media tablet market, and, more important, a wide range of choices. There will be Windows-based tablets of varying sizes and capabilities, up to and including big, powerful PC-based tablets. Choice is good.
A credible Windows tablet platform also provides users with an interesting best-of-all-worlds scenario when it comes to media ecosystems. On the iPad, for example, you're pretty much limited to Apple's online store for TV shows, movies, eBooks, and so on. On the Kindle Fire, you're limited to Amazon's. (There are exceptions, obviously. You can use Netflix on either, for example.) But only a Windows 8-based tablet would accept content from both of these stores. You could play a TV show purchased on Amazon and then play one purchased from iTunes, back to back. You can't do that with either the iPad or the Fire.
Apps represent an interesting conundrum. Apps written for iOS will only run on the iPad, ever. Apps written for Android will run on the Kindle Fire (or at least a subset of those apps will). And apps written for Windows will run on the Windows tablets. This divide isn't likely to be crossed at any point, so it remains a point of differentiation. Right now, Apple offers a tremendous selection of apps for the iPad, and the Fire apps selection is already very good. It remains to be seen how or if developers will respond to Windows 8, the Windows Store, and Metro-style apps.
Assuming developers do respond, the apps situation on Windows 8 tablets will be consistent across ARM- and PC-based machines. So a user could purchase a single app and run it on both types of devices. This consistency and compatibility could prove to be a major advantage of the platform, again assuming that the market for Metro-style apps grows appreciably. We'll know more about this within just a few months, since I believe Microsoft will open the Windows Store well before Windows 8 ships.
If Microsoft does the right thing with ARM-based tablets and offers a true device experience, Windows 8 could offer a compelling alternative to the iPad, Kindle Fire, and other media tablets and do so at very low price points and with a bewildering range of device sizes and types. If Microsoft does not do this, it will still command a decent chunk of the overall market for what I'll call "mainstream computing devices" (i.e. PCs plus tablets). But this market will begin to be much more heavily tilted towards Android (Fire) and iOS (iPad) devices, and away from PCs, over time.
Put another way, it's not enough for Microsoft to dominate the traditional PC market, as that market will shrink as a percentage of the wider market for computing devices. Instead, it must have a credible alternative in the media tablet market, which I think of as the market for devices. And ARM compatibility with Windows 8 is the first step towards that future. Microsoft just need to get the platform right.
Will they? We'll find out soon.
