Tesco is selling a tablet named ‘The Hudl’, a challenger to the Amazon Kindle Fire and Google Nexus 7. The Hudl is priced at £119, slightly more expensive than the Kindle but a little cheaper than the Nexus 7. It runs Android 4.2 and comes with 16GB storage has a 1.5 quad core processor and comes in lots of pretty colours. As you can tell by the specs in relation to the price, the tablet market is extremely competitive with the profit margins being extremely thin. We may even wonder why companies with such large profit margins even want to put out items that make such little profit per item, perhaps they even lose money on each defice. Tesco don’t have their eyes on your wallet, they have it on your data and the services you use.
It isn’t a new concept to sell tablets at cost; Google priced the Nexus 7 with an aim of increasing the Android user base and promoting the Google Services tied to that Operating System. Google’s revenue still largely comes from advertising incorporated in to these services and the data you feed in to them. It’s also pretty clear why the Amazon Kindle Fire is cheap. Amazon has a bunch of content services they want to push on you, even if they don’t make profit on each tablet they sell, it gives them a way to push services such as the Amazon owned Lovefilm, Amazon Appstore and Kindle ebooks.
Tesco finds itself in a very similar situation to Amazon and Google. I had a brief play with a Kindl in store, they too push content services, with a big push currently going on for Blinkbox (a sign above the Hudl urged me not to forget that if I buy a DVD at Tesco I get a free Blinkbox copy – to watch on my Hudl) but there were other pushes for a music store and Tesco online. My guess is that Tesco will want to go one step further and merge its digital and physical efforts. It club card scheme is a massive data mining effort with personalised vouchers going to every customer already and the next logical step is to beef up their club card data with data mined from hudl for even more personalised offers, both virtual and in store. When buying a tablet the important question should no longer be how much does it cost in terms of pounds and pence but which data mining effort am I agreeing to in the terms and conditions.