Author Archives: Jeremy Toeman
The Only Two Ways People Watch TV
Over the past 30 years we’ve evolved the television experience from something where everybody watched the same shows on the same channels on the same devices in the same rooms at the same time to a world where that’s almost never the case. Today, with the exception of appointment TV, it’s such a fragmented landscape that it’s almost a challenge to find other people watching the same stuff you do. But with all the variance in content, services, devices, location, price, etc, there’s still really only two ways people choose to watch TV. This is a subtle, but extremely important concept to anyone in the business of changing television.
Deliberate viewing: you go to the TV with a specific piece of content in mind. This includes live TV (“let’s watch Idol at 8pm tonight”), your DVR (“I need to watch last night’s 30 Rock”), and any VOD/OTT platform such as Comcast OnDemand, Netflix, Hulu, etc (“I’m going to watch the first season of Breaking Bad”). We could also include a deliberate type of content in this category (“I’m going to watch a comedy” – not necessarily something you’d say out loud, but if you are in the mood for something funny, that’s a pretty deliberate concept). I also refer to deliberate viewing as “search mode” for TV, since you will specifically search for the piece of content you want, whether by changing the channel, navigating your OnDemand menu, or going to your DVR library.
Random viewing: you go to the TV with no idea what you want to watch. This includes simple channel surfing (“nope, next!”) as well as direct channel changing (“I wonder if anything good is on TNT now. Maybe Shawshank or Blues Brothers??”). It also includes browsing the OnDemand options (“I wonder if there’s anything new on Netflix?”) and even your DVR (“Maybe we recorded something we haven’t watched yet?”). I also refer to random viewing as “browse mode” for TV, since you are just perusing lists of stuff until you find something you are content to watch. Note the last phrasing here, as random viewing is less about the “excitement” factor of watching something deliberately, and more about the “good enough to pass the time” factor, with the potential for excitement.
Now for the cold, hard fact: any “future TV” service or product which doesn’t account for both types of TV viewing, will fail. This includes OTT services, smart TV apps, second screen apps, third screen apps, eighth screen apps, widgets, websites, gadgets, platforms, and everything else under the hood. Again, if you cannot service both primary needs of a viewing audience, your system is a goner – unless, that is, you are specifically aiming to replace an existing component of those services (in other words – if your live TV service is designed to replace another live TV service, that’s viable, since the consumer’s ecosystem will still include whatever else it had before).
How do I back this up without cold, hard facts? Because people don’t really change much, and TV, specifically, is not merely “another” activity up there with Angry Birds, Facebook, Pinterest, reading books, etc. Watching TV is a very specific type of activity, one about entertainment and more importantly, escape. Life is hard, TV lets you escape for a period of your day – why on earth would Americans spend 4-8 HOURS per day in front of it otherwise?
So if people don’t change, and people need escape (especially as they age – I’m not talking about 13 year olds here, for the most part), they need some version of deliberate and random lean back TV watching. Could this include YouTube videos? Sure. How about an all-on demand lineup? Doubtful. How about a “TV is just an app” concept? Doubtful. It’s why most cord-cutting theories aren’t holding water. It’s why #SocialTV is still mostly just a fad. It’s why most “second screen” apps are just barely gaining traction. It’s why Google TV is such a mess right now. It’s why Apple TV is still a hobby. Sure, these things work absolutely great for some, but absolutely don’t for most.
The future of TV involves a lot of change. And the more things change, the more they stay the same. Long live TV.
My rant on passwords, the most craptastic part of using technology
Seriously, is there anything worse about using websites, apps, services, products, or technology in general than having to enter in usernames and passwords? Half the sites want a username, half use my email address, and most of the time they don’t even tell me which one to enter. Not only do I have many different passwords, I even have different approaches to making passwords on different sites. And not a week goes by that I need to complete some kind of “Reset my password” process.
Some sites want some uppercase letters. Some don’t. Some need a number – but make sure the number isn’t the first character of your password. Some have minimum amounts of characters, some will let me through with “1-2-3-4-5” (yeah, I know, your luggage…). The all time granddaddy for most inconvenience? My online bank. Why? Because when I forget my password, I are required not only to make a new one, but one I haven’t used before. I’m sure this is more secure, but it pretty much creates a 100% certainty that when I come back I have some brand new approach to making the password this time, and therefore, will forget it again the next time I return.
Unless I cheat, and write down the password somewhere, or save it in a google doc. Which pretty much invalidates the entire purpose of all of this added security.
Oh, and I’m sure it doesn’t help that 90% of the “remember me” or “save my password” features fail. Which is doubly bad when its a site that has some obscure requirement on usernames, so I can’t remember those either.
It’s awful, and I’m sure that it creates a major amount of headaches and frustration for the typical Internet user.
Supposedly Google is trying to fix it with “automatic strong passwords” but it just gets me thinking: maybe not every single site needs a super strong password system? Do I really need a distinct username for my online bookmarking service? Or for Words with Friends? Isn’t that the entire stated purpose of Facebook Connect? Is there no way for me to “trust” that this really is a computer only I have access to, and for me to relay that concept onto the websites I want to use?
And I think that’s part of the inherent problem here: every single individual site, service, app, etc is taking on the entire trust responsibility themselves. There’s absolutely no common sense in play, just a CYA style approach to “best practices”.
So I’ll personally waive some of my online security to the sites I use. Yes, online banking and credit card companies, this is the only computer I plan to access your sites with, and if I visit, then yes, it’s me visiting. This goes to you too, video sharing site, online game, and document backup site. If someone steals my computer, I’ll deal with the consequences and will use the service you build me to un-authenticate this one. And yes, Zynga, all the apps on my phone are mine, and only I will be playing them. And if someone should snatch my phone, I too will take responsibility to close access remotely. Because in all of these examples, I can do exactly that.
I’m not trying to diminish the needs for security and privacy (I’m a huge privacy advocate), but I believe we need to distribute and balance the responsibility in solving this as a relationship between users and services. I don’t need an extra set of keys to every room in my house, nor provide a thumbprint to use the stereo or air conditioner in my car. Let’s assume that we do need some strong passwords, good encryption, and safety standards, and let’s also assume human beings can take responsibility for their actions once they are properly informed and the right experiences are delivered.
Can Social TV Survive Without Appointment TV?
So the Grammy’s unsurprisingly (I will explain why I say it that way in a moment) set all sorts of records for social TV. Just like the Superbowl did a few weeks ago. Just like the ___ did a few weeks before that. I call this a big yawner, but first, some definitions:
- Appointment TV: a TV show where the majority of the audience is watching live. The 5 primary examples are Reality Shows (American Idol, Amazing Race, etc), News (CNN, uh… CNN Headline News? I don’t know, televised news is just propaganda in my opinion anyway – but I digress), Sports (mostly hockey, particularly the Canadiens), Events (Oscars, Royal Weddings, etc), and “big episodes” of scripted television (Lost Series Finale, Game Of Thrones Season 2 Premiere, etc).
- Catch-up TV: everything that doesn’t fit into Appointment TV above. Literally. Every “typical” episode of every “typical” show is in the catch-up category, which means there is no particular driver for someone to watch it anywhere near to real-time. This is why I’m still on Weeds season 5, Entourage season 6, etc, and will catch up on things like Breaking Bad, Game of Thrones and others whenever I find the desire.
- Social TV: let’s do this SAT-style. Social TV : TV :: Social Media : Web. In other words, it’s a nebulous mess of “stuff you use things like Facebook and Twitter to do while watching TV”. It includes hashtags, check-ins, second screen, likes, and is a big jumbly undefined thing. And I have no problem with that.
So why do I say things like “unsurprisingly” and “yawner”? Because this is a burgeoning activity. We are at the very earliest stage of people using second screens whilst (yup, whilst) watching TV. I myself tweeted a couple of times during the Superbowl (really during the ads):
This is an infinite increase over last year’s SuperBowl. I didn’t watch the Grammy’s, but had I, I likely would’ve tweeted. And this isn’t just about me, it’s a pretty universal trend. Why? Because Twitter, the platform we are using to measure Social TV as a concept, is still growing. So anything measuring a growing service with growing use and calling the outcome “record-setting” is really just fulfilling an exercise in redundancy. Every new instance of appointment TV tweeting will outpace all previous instances, until Twitter stops growing.
But really, that’s all just a sidepoint. My issue, concern, and question, is whether or not there’s any value whatsoever in any of this for catch-up TV. Do I care about tweets someone sent during an episode of House from last year? Or last week? Or even 10 minutes ago? I don’t, and I don’t understand why someone else would either. Nor do I care about what someone is watching right now unless I too can (and should) watch the same thing, at the same time. Heck, I hate seeing the promos to text in my vote (to Top Chef, my guilty pleasure show) when I’m seeing an episode 4 months after it aired.
I don’t see a solution to this conundrum. To be clear, I’m not questioning will social media impact TV behaviors – that will certainly happen. Further, as evidence is mounting that catch-up TV is growing steadily and will inevitably outpace real-time/appointment TV, I see the window somewhat shrinking for what’s currently called “Social TV.” But that shouldn’t really surprise anyone, as it’s such an early stage in the evolution of TV. And if you think about it in evolutionary terms, TV is just learning about making fire now, and the wheel is probably a few years away…
The Case Against an Apple Television
I’ve flip-flopped better than a politician on this topic, but just read an awesome piece that I wanted to share. Highlights are:
Most fundamentally, all assumptions about Apple seem to stem from a misunderstanding of how differently Apple thinks and operates from everyone else.
For starters, Apple doesn’t chase markets just because they’re there. Nor do they get sucked into market share battles just so they can say they sold the most units (see: iOS vs. Android).
…
In other words, for an Apple TV to be free-flowing with first-tier TV content in the same way that an iPod flows with first-tier music, Apple will need DIRECTV and/or Comcast to bless it.
ESPN, after all, earns $4.69 per subscriber household in affiliate fees on each and every cable subscriber. Apple’s good friend, Disney, owns ESPN, ABC, Disney Channel and a slew of other channels. Disney simply isn’t going to throw billions of dollars away in affiliate fees just so they can help Apple. All of the major TV content players view the world similarly.
…
So where does that get you when you connect the dots? I’ll tell you where it doesn’t get you … to a television-like device that:
- Is priced 2-4X the cost of an iPad.
- Has sales cycles of one device every 5-10 years.
- Has bad margins.
- Has a serviceable form factor that for many people is good enough. (Apple challenges industries where the baseline experience is terrible. Television hardware wouldn’t seem to qualify.)
I strongly recommend reading the rest of it as well, one of the best perspectives I’ve seen on the topic of Apple in general actually.
Data Confirms: Apps + TV = :(
Research firm Xyologic released a bunch of statistics about Google TV today. And those statistics point squarely at the amazing lack of app installs on the platform. Granted, these aren’t official numbers from Google or anything, but they seem quite believable (except for the whole Napster as #1 app thing, which is just bizarre, but then again, so are apps on your TV). Here’s the top 10 chart:
So, people don’t want to download apps on their TVs eh? I guess I’m going to go with the whole “I told you so” as my commentary (and I wrote that piece well over a year ago).
TV isn’t about apps. It isn’t about technology. It isn’t about “interacting.” And most tech startups seem to want to make it a lot more about apps, technology and interaction. Which is probably the leading indicator of why most TV-related ventures crash and burn – unfortunately too many of the folks involved are far removed from the typical TV audience.
I’d go so far as to say “TV isn’t about entertainment” when push comes to shove. I think the best word to use to think about TV is “escape.”
There’s a reason channel surfing still beats out DVR usage, and why cord cutting is still not really a mainstream behavior. Using your DVR or browsing content lineups is not about “escape”. It’s about “work”.
The more the industry tries to get people to “work” for simple, enjoyable TV viewing, the more the industry will be littered with failures. The same is true in the Smart TV space, the Social TV space, the Connected TV space, etc etc etc. Keep in mind, as it is so very relevant, the concept of the paradox of choice: the more options and “power” you give a consumer, the more you will probably just be frustrating them. It’s pretty hard to beat the experience of good ol’ TV today, period.
So if you are building a platform, an app, an experience, a gadget, a whatever to “improve” TV, think about the concept: “are you helping people escape?” If not, it might be time for a “pivot.”
Is Amazon Building a Kindle Set-Top Box?
I’m pretty sure the headline here says it all. Let’s review the facts (it might be worth re-reading my bit on why HBO doesn’t go direct to consumers, as many of those issues are addressed here):
- Amazon has a large content library. They are actively increasing it.
- Amazon has a content distribution platform already capable of streaming to non-PC devices.
- Amazon has a recurring billing relationship with consumers.
- Amazon has a (phenomenal) marketing and distribution channel for getting devices into consumers houses.
- Amazon has a strong brand in the hardware space.
- Amazon has the customer service & support infrastructure needed to deal with service issues.
- Amazon has the ability to build hardware and deal with supply chain issues.
- The TV services industry is huge, and Amazon wants in.
Even if they don’t plan to decouple content from Amazon Prime, making a box is a very viable, and, in my opinion, a likely move. In addition to all of the above, it is a strong move versus Apple (and possibly Google and Microsoft too).
A $99 Amazon Kindle TV box would not surprise me this coming holiday season (how about a September launch, right in time for school?). But then again, I occasionally get Kindle predictions wrong.
Oh, and one more thing. What if they do it by acquiring Roku? Let’s review that scenario:
- Roku already has something better than a minimum viable product.
- Amazon could skip all the work on developing a new UI/UX (regardless of your feelings on the Roku UX, it is well more than functional).
- Roku isn’t a sustainable business yet, enabling Amazon to purchase at a reasonable price.
- Roku has a team with a strong background and industry knowledge relevant to the TV/Device space.
- Amazon can distribute the same hardware at the same price point (which seems to fall in the not-too-profitably category), yet supplement with reliable recurring revenue.
- Amazon wouldn’t have to drop the Netflix service, but could slowly chip away at it from within.
- It’s cheaper than trying to buy Xbox from Microsoft (though that’d be quite the coup, plus nobody would even need to relocate)
I don’t really think Amazon *needs* to buy Roku, but it would probably let them fast-track a bunch of steps. And then it could be a $49 Kindle TV, which just sounds so… right.
Path: To Trust or Not to Trust?
In a nutshell: Path, a facebook-like social networking app, recently found themselves in hot water after a programmer discovered they’re uploading your entire address book to their Web servers when you use it. Mike Arrington’s proposed solution is they should “nuke” all their data (and as disclosure, he’s an investor in the company). My initial reaction is this is absolutely correct, but doesn’t necessarily address my real concern – moving forward, can I actually decide to trust Path or not?
I am in the “no photos of my kids on Facebook” camp. Why? Because Facebook has demonstrated a fairly deliberate motive to not keep my data private. The company actually believes privacy is “Dead” so why would they even care about this kind of a thing? They don’t, and that’s their decision, and since I think privacy is alive and well, I make the (easy) choice not to share anything about my children there (for so many reasons, but here’s one if you need it). Enter Path.
When I first tried Path (and by the way, it’s one of the most beautiful apps I’ve seen for my iPhone), it seemed fairly clear they were pretty dedicated to privacy and your “real” social network. Initially you were limited to 50 friends, and all sharing happened within the confines of the app itself.
Now, the 50 friends limit is up to 150, the app enables sharing to Twitter, Facebook, and other platforms, and, lo and behold, there’s a privacy fail.
One can quickly look back to Facebook and say “privacy fail = no big deal”, unless, of course, your value proposition is around privacy!
As they say, it takes a lifetime to build trust, and mere moments to utterly destroy it.
Path is at a crossroads. They must decide what they are, and what their stance on privacy is, and they must do it imminently. If they want to be “the social network you can trust”, they have that opportunity. But they are on the verge of squandering it. Which leaves them as “the social network that’s not Facebook or Google+” and in that mode, I can’t imagine them doing more than just eking it out if they continue down this… wait for it… path.
I’d love to see Dave Morin (Path’s CEO) use this moment to step up, make a public statement on what the company’s vision is and what they stand for. I for one hope they don’t choose… poorly.
Why 2nd Screen Superbowl Ad and Social TV Experiences Suffered
According to Lost Remote, social media was en fuego during the Super Bowl this year. Bluefin Labs contributed to these stats, and found over 12 million “social media comments” during the game. Another element Lost Remote tracked were the plurality of Social TV Second Screen Apps in play:
The best second-screen experience: To start things off, we checked into the game on GetGlue, Miso,IntoNow, Shazam, ConnecTV, Umami, Foursquare and Viggle. Ok, that’s overkill, but we wanted to give them a spin on the biggest social TV event of the year. For starters, GetGlue sailed passed its all-time check-in, counting over 100,000 before halftime and 150,000 total for the game, 3X its all-time record (the company doubled its servers for the Super Bowl.) We’re let you know of other second-screen stats when we get them.
Now that doesn’t include the “official” Super Bowl app, NBC Sports, or a few other options. But overall, I’m see a glass is half empty scenario myself.
The problem was in the experiences. I tweeted a couple of times during the game, by using the Twitter app, which was native and easy to do. The thought of launching another app, just to get something that would enable be to tweet never even crossed my mind. In reality, most of these apps actually got in the way of the experience. And yes, while there was tons of tweeting and updates occurring, I’d lay down a strong bet most of this was about people posting, not reading what others were posting.
I also found the Super Bowl ads highlighted two major flaws in the ad experience. Shazam got a lot of pre-game buzz for all their ad partners. Sounds cool in theory, but the experience is just plain lousy. First, the commerical starts airing. Then, at some point in the middle of the ad a little Shazam logo appears somewhere on the screen (I only noticed it a handful of times personally). At this moment, the viewer must grab their phone, turn it on, unlock it, switch to the Shazam app, and then – and this is important – get everyone in the room to be quiet for 7-10 seconds. Great in theory, but this is not a good experience for any user.
The second was a QR code which displayed on screen. This in my eyes was even worse than Shazam, since QR codes require the user to have a QR app, which is just too obtuse for the average viewer.
Compare either the Shazam or QR experience to having a simple URL onscreen. Is it really easier to go through all the hassle and end up on the Honda website, or just tell the user to go to honda.com? Plus, by obfuscating the simple methods, advertisers lose brand reinforcement AND are busy handing over the experience to a third party. Similarly, when it comes to social experiences, is it to a consumers’ advantage to launch an app just to get an update into Twitter or Facebook, or to just use the native ones?
These experiences have come a long way, and are offering exciting potential for the future of TV and second screens. But so far, we’re clearly at the infancy of what the consumer can use to really “enhance” a TV offering. I hope some or many of these offerings will improve over the years, and really create a better experience, not one that makes us work harder just to watch TV.
It's got a pen?!
For the 14 people who missed the Super Bowl this year, a “notable” commercial was the debut of the Samsung Galaxy Note, which basically enlisted virtually every trick of the trade. Hipster rock band? Check. Playful teasing of Apple users? Check. Flashy seeming new gadget? Check. Tablet with a stylus? Check. Wait a sec, rewind, what is this, 1998? Or, as I tweeted (and BTW, Twitter – yet another simple feature: enable easy embedding and reblogging of tweets to other platforms, because screenshots? really?):
So my advice this evening is to Samsung and everyone else competing with the iPad – which is actually nobody in reality. If you want to play this game, you need to stop grasping at straws. Go build a damn good product and the market will support your endeavors. I’d heard some interesting buzz about the Note, that it might be the first “other” tablet to give the iPad a real run for its money. And then? StylusGate.
Now wait, maybe it’s not about consumers. Maybe it’s enterprise or other specific applications. I’m sure there’s a decent market in several verticals for a tablet with a stylus (something I blogged about a full year ago now!). But your marketing wasn’t about some productivity device, it was about consumers.
Does anyone really think any hipster, businessman, student, soccer mom, or any other typical consumer with an iota of self-respect would walk around using a stylus when everyone else doesn’t have to and can accomplish the exact same goals? That commercial didn’t show a product superior to an iPad.
That’s the key thing here. The stylus is showing up in an effort to get on par with the iPad’s user experience.
Except it doesn’t.
Not even close.
Why Smart TV User Interfaces Suck
Please don’t look at the following images on a full stomach:
Ok, sorry I had to do that, but it’s important. And to my friends on the TV manufacturing side of the world – it’s not your fault! It’s not your fault! Most “Smart TV” user interfaces, suck, and you’re doing your best. But fundamentally they violate so many rules of user experience design. But why are they so bad? In a nutshell, its for the same reason you don’t expect loggers to sell fancy high-end furniture (think about that one for a second). The products are being built from the wrong end of the production team.
Let’s agree that user experience design is a challenge to begin with. Apple does it great, everyone else, not so much – and even Apple products have flaws. Further, virtually everything about a “ten foot” user interface (the terminology we use to describe what happens on-screen on your TV) is a broken interaction model, so this is going to be crippled no matter what. I’ll write about this more in the future, but I believe there’s a fundamental breakdown on the limitations of what you can do with any 10′ UI and a remote control, regardless of gestures, speech, etc.
Next, per my logger analogy, effectively the teams building these products have absolutely no experience nor expertise at this kind of design. The world of consumer electronics has (barely) evolved from dials, knobs, and switches to doing highly complicated interfaces on screens. Not only that, every year the requirements are changing!
And since this is a new field (despite almost 20 years worth of ten-foot UIs), there are very very few folks out there who have dived deeply into this problem (the Wikipedia page on the topic barely even requires a scrollbar to read everything). So the same people who are used to just getting the TV to work right, are now also in charge of creating “an experience”. I think this is a guaranteed to fail situation, and it’s unfortunate for everyone involved.
I do have some tips and thoughts for these UIs, since I can’t effectively get everyone to just up and stop making them (pretty please?). First, you can read my comments a while back on designing better Boxee and Google TV apps. Now, here’s three more things to think about:
- Stop making things look like Commodore 64 graphics. Seriously, I understand the graphics processors inside the TV platforms are low powered inexpensive solutions, but people have a natural (bad) reaction to seeing such low quality graphics on their beautiful HD sets. If you can’t match them up, find ways to cut down on the overall interface and use the scarce resources to make things prettier. See Boxee, Google TV, and Apple TV for the “prettier” 10-foot experiences.
- Understand a 2D “grid” of options. Many of these UIs create multiple planes of interfaces, yet fail to recognize the user has to navigate with a simple UDLR remote control (or wand or whatever). This creates unpredictable experiences, and makes your user less naturally comfortable with the interface. You should be able to look at the screen and always know “what happens if I push the Up arrow button”.
- Reduce button clicks. At no point should the user have to click more than 3 times to get from one part of the screen to another, and you should never create an internal scrollable region. For example, my VUDU service (which I love) has me scroll through long lists of movies when browsing a category (such as Comedy/Drama, which, let’s face it, really means depressing movie with some funny moments). But, as a result, if I want to change the category,I need to scroll all the way up to the top of the screen again to choose a new option. This is too much work!
Ultimately, this again reinforces my belief that anything new coming from Apple will be highly based on AirPlay concepts, and the 10-foot UI will one day be a thing of the past. And what will replace it? This.
Did Manufacturers Lose $2 BILLION on Android Tablets Last Quarter?
Strategy Analytics announced today: “Android Captures Record 39 Percent Share of Global Tablet Shipments in Q4 2011”. Bloggers go nuts with it, headlines such as “Android Grabs 10% Tablet Market Share from Apple in Q4 2011” and “Android tablets gain ground with 10.5 million sales in Q4 2011“. Here’s a quick fact check: the report was about tablets shipped, not sold. Sounds like a minor little nit, but it isn’t, and if you’ve never been inside the actual business of hardware before, it’s a fairly common mistake.
Shipping a product implies it’s been manufactured, packaged, and transported into a distribution facility, and in some way allocated by a retailer. It hasn’t necessarily been purchased by the retailer yet, nor has it been sold to a consumer. Which means a massive cost was incurred by the manufacturer, with no revenue so far. Further, even if the retailer has made some form of purchasing agreement/commitment, they typically have many many ways to back out if units aren’t moving. All, of course, at the expense of the manufacturer. This is how Logitech lost $100 million on the Revues, as they made a bunch, but couldn’t sell them. As Seinfeld might’ve put it: “See, you know how to ship the product, you just don’t know how to sell the product and that’s really the most important part of the product, the selling. Anybody can just ship them.”
So let’s go back to that report. 10.5 million Android tablets shipped in Q4. Not too shabby. Now Apple did just announce they sold 15.4 million iPads in the same quarter. So we know we aren’t talking oranges-to-oranges comparisons already.
I’m going to add in a personal observation/anecdote here, take it with a grain of salt. In the past year, at over 20 conferences, 30 flights, and possibly hundreds of meetings, I’ve seen about 15 android tablets in use “in the wild”. I’ll go as high as 20. That’s it. Not only isn’t it close to 40%, it’s not even close to 1% of the tablets I’ve seen in use, in every major metropolitan area in North America. But that’s not a fair way to look at it, so I’ll assume I’m off by a few percent, especially including the international market plus the recent hotness of the Kindle Fire.
But let’s pretend they somehow sell-through 5% of the total tablet market, as defined by iPad sales. That’s 750,000 units sold. Maybe a little low, but as I scan the numbers from a bunch of different reports, doesn’t seem too far off the mark (NPD reported a grand total of 1.2 million non-Apple tablets sold between Jan-Oct last year). Let’s bump it to a cool million, just to seem “fair”. That leaves manufacturers with 9 million unsold tablets.
According to a variety of reports (best from iSuppli), tablets cost manufacturers between $200-$300 to manufacture, on average. So again, averaging it all out (which isn’t exactly right, but that’s kind of the theme of my blog anyway, right?) at $250 times 9 million units equals holy crap.
$2,250,000,000
Oh, and this doesn’t include marketing, packaging, shipping, warehousing, taxes, and all the other costs involved. Please, somebody, show me how I’m wrong! No, seriously, I don’t actually want to be right here!