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Why not tablets for vertical markets?
2 points by rwallace on Nov 4, 2012 | hide | past | web | favorite | 2 comments
The first flurry of tablets came out in the early nineties. The technology wasn't yet good enough to be attractive to consumers, so the talk was about vertical business markets. Insurance claim adjusters, aircraft technicians referring to manuals and diagrams, hospital staff doing the rounds, retailers taking inventory etc., basically everyone who works on their feet instead of sitting at a desk and needs some form of data processing should find tablets handier than laptops.

And the vertical markets never happened. As soon as everyone realized the technology wasn't yet good enough to be attractive to consumers, the entire nascent tablet industry just went into the recycle bin.

Tablets came back in a big way when the technology did get good enough to be attractive to consumers. Vertical markets should ride on the back of that, right?

But it doesn't seem to be happening. All the news is about stores clogged with hundreds of thousands of ADD-inducing entertainment "apps"; the use of tablets for domain specific business software is never mentioned, and it's hard to see how it would even be possible if everything has to go through the "app store".

So - why not? The logic still seems sound; tablets should be ideal for vertical markets; why isn't it happening? Or is it happening and we just don't hear about it?

Verticle markets were a hypothesis about how to get people to pay. Tablets were actually used in the 1990's in specialist/niche applications. The combination of enterprise customers with special needs would fork out $$$ for special-needs units. This actually did happen -- look at pictures of the NYSE trading floor from the time. People with a lot of money (and more to be made) underwrote secial-use tablets (complete with wireless 28.8 modems, etc)

Today, an iPad likely does not need modification to do most tasks, that were the placeholders discussed in the 1990's. It would have to be 10x better than the iPad, to be compelling to a vertical market player today. But, I don't think there is an order of magnitude opportunity on the sidewalk. The main constrains seem to be power/weight. As soon as you get to 2x Ipad4 you are looking at something like an 11-in MBAir, but that's already on the market for 1.5x the iPad cost.

So a speciailst unit would need to be something like the size of the iPad mini but with the power of a MB air. All in some kind of form factor (hardened/waterproof/secure) that was unique to a specialist application. I do think there are opportunities for that, but I'm inclined to think AAPL might be better to have a go at them. They would need an OSX competitive operating system, something like 512GB of flash memory, and some unique specialist application SW to be written.

That seems like a lot for a new entrant to pursue, and its unlear the market is large enough for a new entrant. Where the consumer/global market is now 1 billion middle-class professionals, gov'ts, and schoolkids, etc. The issue with pricing these things at $4-6K is that the depreciation would probably be huge.

I'm not sure why. Maybe it's because the enterprises think the iPad is good for everything, so they don't need to pay for any other one. Panasonic has been trying this:


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