Posts Tagged: tablets

Jan 11

CES 2011: putting Apple in its place

It only takes 2,700 exhibitors to put Apple in perspective.

The annual Consumer Electronics Show is unimaginably huge. More than 33 football fields’ worth of displays. I left my measuring tape at home, but I suspect Sony filled one of those football fields all by itself.

While Apple declines to show up at such gatherings, their absence allows us to make some interesting observations. Much the same way that astronomers draw conclusions about planets by examining the forces surrounding them.

First, just to keep the astronomy metaphor going, it’s hard not to appreciate the “speck in the universe” aspect of Apple when you walk around CES. Apple is dwarfed by the sheer volume of its competitors. It is also dwarfed by the many lines of products offered by its biggest competitors.

Having been to enough Macworlds in my day, it’s easy to imagine what Apple’s booth would look like next to the booth of, say, Sony or Samsung. It would be a fraction of the size, simply because Apple focuses on a relatively small number of products — featuring only single lines of desktops, laptops, music players, phones and tablets. The other guys have product lines out the wazoo, churning out everything from TVs and DVD players to washers and dryers. I imagine it will be a while before we see Apple going up against Whirlpool.

Apple’s accomplishment, however, becomes more amazing given the number and size of its competitors. Creating far fewer products, selling to far fewer people, Apple generates more profit than every last one of them. By far.

Standing in that Sony booth, being awed by the depth and breadth of that company’s product offerings, watching the enthusiasm of the crowds, it defies belief that Apple is the more successful — and more valuable — company. In my opinion, it’s the ultimate tribute to the power of simplicity.

There’s only one reason, of course, why any company would bother with CES in the first place. It’s that one time of the year when they can buy themselves some great PR and generate excitement for their new products. In other words, they have to pay for what Apple gets free all year long. While some may grouse about that, let’s not forget that Apple doesn’t derive this benefit because journalists, bloggers and media companies have such big hearts. Apple gets the buzz because over a couple of decades, they’ve repeatedly created new categories by innovating so successfully. They’ve built expectations that are in themselves newsworthy.

Last, I did want to offer an observation about the many tablets on display at CES. Rather than bore you with model-by-model reviews, I’ll just say that there are a number of solid contenders out there. There is every reason to believe the tablet market will evolve much as the smartphone market did. Apple takes the early market share lead by reinventing the category, then Android and the others step in with more features and lower prices. Fans of those platforms will find much to like. Ultimately Apple will sell fewer units than the others, but as is the case with computers and smartphones — they will continue to generate greater profit.

As long as Apple continues to innovate as it does, there will be a large audience willing to pay the premium.