iPad breakup

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Voices


Back in 2011, I was having an all-consuming love affair with tablets. At the time, I was the first-ever head of mobile at Netflix. I saw tablets in my sleep, running apps that would control homes, entertain billions and dutifully chug away at work. Tablets, I was convinced, were a third device category, a tweener that would fill the vacuum between a phone and a laptop. I knew that was asking a lot — at the time, however, I didn’t know just how much.

I wasn’t the only one swooning in the presence of the iPad and its imitators. Everyone was getting in on the love fest. The typically sober analysts over at Gartner were going ballistic with their shipment predictions for the iPad, and a flurry of soon-to-be-launched Android tablets. Amazon (Kindle Fire), Barnes & Noble (Nook Tablet), HP (TouchPad running webOS) and even BlackBerry (PlayBook) all rushed into the market to take on Apple, which commanded 70 percent of the tablet market one year after Steve Jobs unveiled the first iPad. On the software side, startups like Flipboard, tech giants like Adobe and even large enterprises like Genentech were quickly assembling teams to take advantage of this new platform.

Now — three years and 225 million tablets later — I’m starting to see how misplaced that passion was.

The tablet couldn’t possibly shoulder all the expectations people had for it. Not a replacement for your laptop or phone — but kinda. Something you kick back with in the living room, fire up at work and also carry with you everywhere — sort of. Yes, tablets have sold in large numbers, but rather than being a constant companion, like we envisioned, most tablets today sit idle on coffee tables and nightstands. Simply put, our love for them is dying.

In some ways, I shouldn’t be surprised — the tablet has let me down before. A decade ago, I was at Microsoft trying to convince both consumers and big companies to buy tablets. A number of hardware manufacturers were partnering with Microsoft to finance and market the development of devices running Microsoft Windows XP Tablet PC Edition — a mouthful, yes, and not many customers were interested in even taking a bite.

We teamed up with HP, Toshiba, NEC and Fujitsu, all of whom spent millions alongside Microsoft, and failed to create a bona fide category at the time. Why? “Tablet PCs,” as they were known, required a stylus (versus today’s touch-interaction model), and more importantly, only had a few tablet-optimized apps. We now know that’s a recipe for disaster.

But a few years later, it seemed that the world had changed, and the tablet was finally going to live up to all its promise. At Netflix, the tablet was stealing time from the browser with increasing speed month after month. To take advantage of that shift, I focused our entire team’s efforts on a complete redesign of the tablet app. We introduced a slew of features that took advantage of the screen size and touch interface. It was, if I may say, beautiful.

Post-launch, the new app significantly increased retention and streaming hours. It won reviewer praise, barely missing out on winning the Best Tablet App of 2011 at the Crunchies — it was a hit. And then it seemed, as soon as it had arrived, the tablet lost its momentum.

At Netflix, we witnessed a dramatic increase in phone usage for the streaming service — all that binge-watching of “Sons of Anarchy” and “House of Cards.” The reason was obvious: As phone apps improved in terms of quality and speed, users abandoned their tablets for the device in their pocket that could access the Web anywhere and anytime from Wi-Fi or cellular connections. Conversely, only 12 percent of tablets have cellular connections, instantly making them non-mobile devices. And very few people will shell out for a second wireless plan in addition to their phone. Based on the momentum of the phone, Netflix decided to merge the tablet and phone UIs.

Even the awards circuit lost interest in the tablet. The year after our tablet app premiered, the Crunchies ditched the Best Tablet App award. They haven’t brought it back since.

What I realize now is that it has been the phone all along. What we are witnessing today is a merger of phones and tablets, not just at Netflix but everywhere, which is why this decade’s attempt at tablets is nearing its death — just four years after Jobs launched the original iPad.

It comes down to size. The vast majority of the hundreds of millions of people who use tech every day are just fine with having two primary computing devices: One for your pocket and one for your desk. Tablets are trying (and failing) to be portable enough to go everywhere, yet large enough to be multipurpose. Despite all the keyboard origami and elaborate ways to make your tablet into a laptop, it isn’t one.

Stop trying. Consumers know it — the latest sales data has shown that worldwide tablet sales may have already peaked. PCs took a full three decades to reach market saturation, whereas tablets may have already topped off at the four-year mark.

So, how do tablets evolve from here? What we’ve seen Apple do is shrink the tablet and stretch the phone. Rumors abound that it will launch a five-inch phone later this year, which would follow in the path of successfully launched products from Samsung, HTC and dozens of other Asian phone manufacturers. Follow the trend to its logical conclusion, and it’s quite possible that the two categories will merge this decade.

I’m not saying that tablets will disappear completely. Tim Cook believes that tablet growth will recover as enterprise adoption accelerates and CIOs become convinced of the merits of the platform. But it’s also possible that tablets may simply evolve into single-purpose devices found in kitchens, schools and other situations where keyboards are cumbersome and large screens are preferred.

That’s not quite the revolution that we all originally had hoped for. More to the point, China and the rest of Asia may teach the world that convergence to a single five-inch device that fits in your pocket or purse will be the best route to profits. “Phablets” like the Oppo N1 running Cyanogen may have already launched the third and final wave of “tablet” innovation.

Cue the sad music for the tablet we all loved, and that many still do. Except now as I glance over at my original iPad, iPad mini, Kindle Fire and Motorola Xoom, acting like paperweights, I realize I don’t miss them — especially when I am curled up with my five-inch phone fitting comfortably in one hand. Love is harsh, the pace of technology innovation is harsher, but the future certainly does look phabulous.

Zal Bilimoria is a partner at Andreessen Horowitz, focusing on investments in mobile, marketplaces and the sharing economy. He recently joined @a16z after spending the last 10 years in product management roles at Microsoft, Google, Netflix and LinkedIn. Zal was also the co-founder/CEO of Snip.ly, a content curation startup based in San Francisco. Reach him @zalzally.



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