Sharon Machlis

Nexus 7, Jelly Bean winners and losers

June 28, 2012 3:54 PM EDT

Here are some thoughts about winners and losers following some of the major announcements at the Google I/O opening-day keynote:

Winner: Asus. As the manufacturing partner for Google's Nexus 7 tablet, Asus should get a nice-sized chunk of the 7-inch tablet market in the U.S. It's hard to know exactly what that means financially for the Taiwan-based electronics company, given the low price and likely low profit margin for the device. And, that market may not be very large compared to that for larger devices, especially if you're talking about dollars spent, not units bought. But seeing the company's smiling CEO at yesterday's Google I/O keynote, I'm guessing it's enough to make the partnership worthwhile.

Loser: Amazon. It's hard to see how the Kindle Fire remains a compelling purchase when the Nexus 7 has a higher resolution display, quadcore CPU (vs. the Fire's dual core), double the RAM, front camera for video chats and is lighter -- not to mention has access to many more apps. The Fire has gone from general-purpose Android tablet optimized for Amazon books and movies to a fairly limited Amazon content-consuming device. Amazon will need to upgrade its entry in this space if it wants to stay a serious competitor (or be content to market to those who are intimidated by choice).

Winner and Loser: Samsung. Samsung is another likely casualty in the 7-inch Android tablet space; as blogger JR Raphael pointed out, compared to the Nexus 7, the rest of the 7-inch tablet market "basically looks like crap." However, if Samsung still wants to play in this market, I expect they'll come out with a more robust competitor in time for the holiday shopping season. And, while Samsung's Galaxy Tab may temporarily be behind in the 7-inch tablet leapfrog competition, its Galaxy Nexus phone is among the first devices that'll be upgraded to Jelly Bean (Android 4.1) next month.

Winner: Google. Both the Nexus 7 tablet and Android 4.1 Jelly Bean update are getting a pretty positive reception; and the Android tablet market, long seen as an iPad also-ran, may soon need to be taken seriously.

Loser: Apple. No, not because the Nexus 7 poses a deep threat the iPad: A 7-inch screen simply isn't a replacement for a 9.7-inch display -- if you're doing tasks where the larger size is compelling. However, if you want a portable device for reading and email that's got a bigger screen than your phone, a 7-inch tablet becomes a more attractive option. Apple may indeed be working on an iPad mini; or they may have decided that the 7-inch tablet market simply doesn't have the profit margins to make it appealing. It's certainly hard to argue with Apple's profit margins, but it still feels risky for Apple to cede the 7-inch tablet market when iOS is already behind Android in the smartphone space.

However, Apple was a loser for another reason: Jelly Bean's natural-language speech recognition and spoken responses give Siri its first serious challenge as a mobile speech interface. Keep in mind that there are only two ways to experience Siri now: Shell out at least $499 for a new iPad or buy an iPhone 4S -- the latter choice not financially viable yet for many Americans who still have a year or more left on long-term phone contracts. However, consumers can access Android's Jelly Bean Siri alternative for just $199, which includes a $25 credit at the Google Play store.

Winner: U.S. manufacturing. Like many industry-watchers, I was astonished to learn that Google's new Nexus Q media streaming sphere will be made in the USA. When was the last time a new electronics device from a major U.S. corporation that's not Bose was built in America?

Winners and Losers: Android developers. Yes, it's great for developers if Android becomes more capable, has better tools and potentially grabs more market share. But what about all that new functionality Google is folding into Jelly Bean? How much becomes too much for developers who also want to provide new functionality? If Jelly Bean comes with a "what's that song?" capability and allows you to then purchase the music you're hearing, what does that do to the popular SoundHound app? If Google Search can better understand natural-language spoken queries, what does that do to folks working on apps like Virtual Assistant? If Android 4.1 can help you find flights, what does that do to competing travel apps? Google needs to make sure that while providing more and more app-like capabilities, they don't become such a fierce competitor that developers worry about the long-term viability of writing for the Android platform.