Ray Sullivan SciFi Zone: Tablets To Cure Inflation

Thursday 15 March 2012

Tablets To Cure Inflation

In the US the Amazon Fire has given the Apple iPad a good run for its money; not enough to hurt the technology giant, but sufficient to give it a bruise. In the UK, Apple pretty much dominates the market. The Fire should have been on sale over here since January, according the the rumours that circulated in December, but clearly that didn't happen. As I've mooted before, perhaps Amazon had bigger fish to fry, such as an unexpected success story in the US that they decided to capitalise on.

The Kobo Vox is probably the only low to mid price tablet attemting to fill the shoes of the Kindle Fire over here and as I pointed out in an update to my main blog entry on the Vox the other day, it's getting a bit of a boost. Up until this week the choices for a Vox over here were, in order of price, Asda (Wal-Mart's UK subsiduary) at £147.00, WH Smith at £149.99 and Play, a subsiduary of Rakuten, Kobo's owner, for £170.49. My best guess was that Play, a traditionally competitive company, was being forced by its parent to keep the price high to give WH Smith a chance to trade against Asda. I'd certainly be surprised if they sold many Vox units at that price and extremely disappointed if any of my readers paid that much, given the information I've provided.

Well, the picture has changed once again, not dramatically but sufficiently to indicate that the kid gloves may be in the process of being peeled off. Although the Asda and WH Smith prices have held steady so far, Play has just dropped its price down to £147.99. OK, Asda still has a £0.99 price advantage, but Play are throwing in a 4Gb micro SD card in with the sale. So technically Play are undercutting Asda for the first time, and believe me, the SD card is a must have for this device. They are also giving seven Vox units away on a comptition being run this week, so they are trying to raise the profile.

So, was it just time for Play to man up and challenge Asda? Could be, and it will be interesting to see if Asda react. They are one of those retailers that don't like being undercut. But it's also likely that Rakuten have decided they need to cement their market position in the UK before the Fire arrives. I haven't seen any convincing posts indicating that the Fire is imminent, but I suspect any company that can afford to shell out $315M on an eBook company can also afford better market research than I can offer.

And in a strange quirk of fate, this might just feed into the UK economy in an unexpected way. Inflation in the UK is measured by comparing the relative cost of a 'representative' shopping basket of items each month and comparing their costs to other months. Sure, staple goods such as milk and meat feature in there, but so do many other items commonly bought. It's just been through its annual overhaul and some items have been dropped. Incredibly this is the first year that camera film hasn't been included; and it's the first year that tablet computers have. Although I'm predominantly a digital photography kind of guy I do dabble in the old fashioned technology and can report that film is flipping expensive these days, so it has probably been skewing the RPI upwards, probably for several years. Including tablets, which I don't see as a general replacement in most households, could push the RPI up further still on current tablet data as the highly expensive iPad is the dominant tablet over here, but come the invasion of lower priced and viable tablets we could see some deflationary presssures from the tablet device catergory.

So a tablet price war, led by Kobo, augmented by Amazon and targetted at Apple could help the Govenment achieve its objective of getting inflation under 2%. Now that's a prediction I wouldn't have felt comfortable in making a few weeks ago.

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