Android and the Tesco Effect

When the first Android smartphones came out, the consensus view among certain "experts" was that Google didn't stand chance. The dogma was that the iPhone was so perfect, and its hold on the market so strong, that there was no way that Android...


When the first Android smartphones came out, the consensus view among certain "experts" was that Google didn't stand chance. The dogma was that the iPhone was so perfect, and its hold on the market so strong, that there was no way that Android could displace it. I think we can say that hasn't proved to be the case:

Android smartphone shipments grew a whopping 73.5 percent between the second quarter of 2012 and Q2 2013, according to research firm IDC's latest numbers. 187.4 million Android-powered phones shipped in the most recent quarter, representing 79.3 percent of all smartphones shipped during the quarter. The next closest smartphone platform was iOS, which shipped just 31.2 million units, accounting for 13.2 percent of overall share.

By contrast, those of us who have been using free software for nearly two decades rather suspected this would happen. Whatever limitations Android had when it first came out, it possessed two huge advantages over the iOS: it was free, in both senses.

That is, it cost nothing for mobile manufacturers to use the code in one of their products – nothing in terms of up-front costs, and nothing in terms of licensing fees. The more important kind of freedom – the ability to modify the code in any way, provided it was released alongside any products using it – meant that any weaknesses could be rectified, and that all kinds of weird and wonderful experiments undertaken. This has led to unparalleled innovation in the Android smartphone market, producing a model for every use, every taste and every pocket, which is largely behind the 80% market share of current shipments.

All of those things should have been obvious to everyone when Android was first launched, but presumably some people were dazzled by the iPhone's undeniable shininess. Given the quality of the iPhone, and its undoubted breaking of the mould as far as smarphones were concerned, that's perhaps understandable.

What is not understandable, is the fact that when the iPad came out, and was similarly impressive, many people made exactly the same mistake. They asserted that the iPad was so good, and its hold on the nascent tablet market so strong, that Android tablets would never displace it etc. etc. etc. And yet, lo and behold, what do we see now?

During the second quarter [of 2013], the report found that Android accounted for 53 percent of the market share — notably thanks to devices with 9-inch or smaller screens.


By comparison, iOS tablet shipments dropped by 14 percent, with Apple's market share falling to just 43 percent.

However, Android's rise to dominance in the tablet sector is not just a case of recapitulating its ascent in the world of smartphones. That's because tablets have some special features which mean that Android is not only beating iOS here, it is doing things that the iPad will never be able to, unless it, too, goes open source, which seems highly unlikely.

Arguably the first and perhaps the most important company to tap into that possibility was Amazon. When it launched the Kindle, it was not as a "pure" tablet computing device, but rather a tool for consuming content from Amazon. It was offered – at a knock-down price – as an adjunct to other, more profitable sales, rather than being sold with a view to making money directly. That was only possible thanks to Android's double freedom mentioned above, which allowed Amazon to produce a very low-cost but capable device that was exactly tailored to its own needs, and those of its customers. In other words, it served a vertical market, albeit a huge one.

That was a typically bold move from Amazon, but not one that was followed up by anyone else in a similar way – until today:

Tesco today launches Hudl, a new 7 inch HD tablet that aims to open up a world of entertainment and connectivity to all. It has been designed by Tesco for its 20 million customers and more, focusing on accessibility and convenience.

With super-fast 1.5GHz quad-core processor and dual-band Wi-Fi, users will find Hudl a great companion for their needs, from films, music and TV through to staying in touch, learning new things, shopping and playing games. The scratch-resistant HD display screen is beautifully clear and with 243 pixels per inch, it's perfect for enjoying HD movies in 16:9 widescreen. It has up to 9 hour video battery life and 16GB of memory which can be extended to 48GB.

Hudl combines the best of Tesco with the Android Jellybean 4.2.2 operating system meaning that customers can access everything on Google and over a million apps.

Tesco designed and built the tablet from scratch, tailoring it around customer needs and ease of use. Hudl users can enjoy instant access to Tesco's full range of digital services, all in one place, through a convenient, dedicated launcher button. These include blinkbox movies and TV, music and Clubcard TV (which offers free films and TV programmes exclusively for Clubcard holders), banking and of course shopping for groceries, clothing, homeware and more.

Once you get over the initial shock of Tesco offering its own tablet, not somebody else's, it all makes perfect sense. The Android system is not only well-known now – unlike when Amazon adopted it for the Kindle – but mature, as the existence of those million apps shows. It's true that most of them are rubbish, but the total number is now so large that there are tens of thousands of good ones that let people do more or less anything on their Android tablet. The free and increasingly familiar Linux-based operating system was the obvious choice when producing another vertical market system like this.

And as Tesco's press release makes clear, that is precisely what the new Hudl is about: providing a dedicated platform for its music, films and TV services. As with Amazon's Kindle, this is not about selling hardware in its stores, but making it even easier to purchase and use Tesco's digital services.

Even if others were slow to follow Amazon's lead in adopting this approach, I predict that Tesco's move will cause a very rapid uptake of this idea. Soon there will many dedicated, branded, Android-based tablets available from larger companies that want to make more money from their digital services, whatever they might be.

And given that the the price for a basic but usable Android tablets is still falling rapidly, and will continue to do so for some time to come, the range of industries that will do so will also continue to expand. When 7" tablets cost £100, then £75 and finally £50 or less, it will be possible for practically any medium-sized company to recoup easily the cost of paying new kinds of specialist design companies to develop such a system. This will lead to a flood of such Android tablets, until most households will end up with several of the things. Of course, that raises important questions about the use of scarce resources, sustainability and recycling, all of which will receive renewed impetus as a result of this trend.

But for the moment, the key point is that neither Apple nor Microsoft will be able to compete in this new vertical market sector. Even if they gave away their operating systems for free they could never match the other freedom of Android, which allows companies to customise the system in any way, and without needing to ask permission.

That's why Android's market share lead in the tablet sector is likely to be even more crushing than it is for smartphones. Call it the Tesco Effect.

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