Nvidia CEO: Why Android tablets aren't selling
Nvidia's CEO didn't mince words when explaining why Android tablet sales have been dismal so far. Lack of apps is only part of the problem.
Nvidia's CEO is not pleased with the cool reception Android tablets have gotten so far. And he expressed frustration over marketing gaffes in an interview with CNET earlier this week.
Sales of the first Android Honeycomb tablet, the Motorola Xoom, when compared with those of the iPad. Though Motorola , that number is far lower than the total being enjoyed by market leader Apple, which sold about 1 million iPad 2 tablets in the first weekend of sales alone.
During an earnings conference call, Sanjay Jha, CEO of Motorola Mobility, articulated part of the problem, saying, "Consumers want more apps for Android tablets."
That's not the whole story, according to Nvidia CEO Jen-Hsun Huang, who I chatted with on Thursday. Nvidia's Tegra 2 is the core piece of silicon inside Honeycomb tablets, including the Xoom and the Samsung Galaxy Tab 10.1.
"It's a point of sales problem. It's an expertise at retail problem. It's a marketing problem to consumers. It is a price point problem," he said, for starters.
Though Huang didn't mention the $499 starting price for the iPad, it was clear that this was a reference point. "The baseline configuration included 3G when it shouldn't have," he said. "Tablets should have a Wi-Fi configuration and be more affordable. And those are the ones that were selling more rapidly than the 3G and fully configured ones," he said.
He didn't stop there. "And it's a software richness of content problem," he added, echoing Jha's comments.
Not surprisingly, Huang was quick to follow up his critique, pointing out that this is only the first crop of Android tablets and not all product categories get off to a running start. "But those problems are all getting solved. The rate at which these Honeycomb Tegra 2 tablets are being improved is really stunning. I think all of the manufacturers have now recognized that and readjusted their plans," he said.
That may be the case, but there are still very real retail hurdles, as DisplaySearch analyst Richard Shim spelled out recently in a blog post. "We continue to believe that Apple has a distinct advantage when it comes to distributing iPads, and this is likely to continue to be the case going forward," he wrote. "Apple is not only better able to explain its product to consumers through dedicated sales people, but it also captures more margin than competitors who have to share margin with retail partners," he wrote.
But considering the weak start for Android tablets, things can only get better. "Best Buy...is creating a dedicated location, called Tablet Central, within stores and online," Shim wrote. "While we continue to believe that there are challenges...creating a separate section for tablets is a good start."
"And it points the company and its tablet hardware partners in the right direction," he concluded.