Fred Wilson and Dave McClure Talk Apple, Google Tablet Battles

7/27/12Follow @jpruth

When Dave McClure, founding partner of startup incubator 500 Startups, visits New York he typically tries to stir up the innovation community. Last night was no different. At the tail end of the one-day Smash Summit, McClure brought Fred Wilson, managing partner of Union Square Ventures on stage to chat about what gets each of them excited in technology, as well as a few of their frustrations.

Smash Summit, held at the Crowne Plaza Hotel at the edge of Times Square, focuses on how to scale up customer acquisition and is produced by events company Next Customer and McClure’s 500 Startups. At the close of the conference, Wilson and McClure had an animated conversation on stage about some of the surprises they saw in the market, especially the way competition between Apple and Google Android mobile devices has shaped up.

McClure said he had expected Android to gain more ground by now with consumers relative to Apple’s iPhone. Wilson said the iPhone in some ways has been defended by the iPad line of tablets, which has held off many rivals in the mobile sector—until this month’s release of the Nexus 7. “I think the best tablet in the world is an Android tablet, the 7-inch Nexus,” Wilson said. “It is the greatest thing that’s happened to me since my youngest son was born.”

McClure, taken aback while cradling an iPad on his lap, expressed his doubts. “I want to talk to you a year from now and see if you still think you aren’t full of [it],” he said jokingly.

Wilson elaborated, saying that he believes until Apple releases a 7-inch tablet (which is rumored to be in the works), the Nexus 7 has his vote as the best tablet. Off stage, Wilson told me the Nexus 7’s size and form factor fits in his hands more readily than larger tablets but, more importantly, the software sets it apart from other 7-inch tablets. “Android just got the operation system right for the tablet,” he said. “The new Jelly Bean build is awesome.”

Both McClure and Wilson saw opportunities for other technologies such as gaming platforms to be leveraged more effectively. Microsoft’s Xbox consoles, for example, are Internet-enabled, potentially opening them up to a world of digital options. But Wilson said the platform remains largely closed to third-party software developers. “Why spend all this money on Surface [tablets] when you could open up Xbox and control the world?” he asked.

Microsoft is expected to release its line of 10.6-inch tablet PCs starting in October. McClure shared in Wilson’s frustration over Microsoft’s method of positioning its stable of technology. “I can’t imagine a larger set of properties that have [crappier] distribution and monetization,” he said. “Microsoft should be crushing it but I can’t figure out how to make Microsoft relevant to most of my companies [in 500 Startups].” Though he saw Kinect—the motion control device for the Xbox 360 game console—as an interesting platform, he said getting third-party distribution on Microsoft properties in general remains a challenge.

Wilson told me off stage that Microsoft could take better advantage of the Xbox line by adopting an approach comparable to Apple’s efforts in mobile. “If they were to open the Xbox the way that the iPhone is open where anybody could build an app on it, it could be a killer platform for them and I don’t know why they don’t do it,” he said.

João-Pierre S. Ruth is the editor of Xconomy New York. He can be reached at jpruth@xconomy.com and followed on Twitter @jpruth. Follow @jpruth

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  • http://about.me/johnrevay John Revay

    ” Wilson said. “It is the greatest thing that’s happened to me since my youngest son was born.”

    A good Fred line – he seems to really love the nexus, so far I think he wrote 3 blog posts on the device, he also commented that he switched to the 7″ form factor for his main device/ smart phone

  • http://engag.io/ William Mougayar

    I’m still looking for a video replay or Storify.

  • http://www.salesverge.com/ Elise

    I thoroughly doubt the Nexus 7 will make a dent in iPad sales. It’s an embarrassing overstatement to compare the birth of the Nexus 7 to the birth of his son.

    I’d like to see how it is marketed towards businesses. I just can’t imagine it having the functionality of an iPad or iPhone. Not to mention, the onset of BYOD (and 68 of the tablet market belonging to Apple) doesn’t seem to favor the 7.

    • http://twitter.com/aminsabet Amin Sabet

      I can see where Fred is coming from. I’ve used every kind of handheld computer I could get my hands on over the past two decades, and the Nexus 7 is the first one that seems “just right” to me. It’s so satisfying to reach that point.

      I don’t think the Nexus 7 will itself make a dent in iPad sales. However, it will kick start a process that will likely lead to Android dominance in the tablet space. The main holdup for Android tablets has been tablet-specific apps. A 7″ display means that phone apps look wonderful, while tablet apps look even more wonderful. Because the phone apps work so well, there’s no glaring app deficiency with a small Android tab like there is for a 10″ Android tab.

      The combination of an incredible OS, cheap price, lack of immediate competition from a small iPad, and the lack of a perceived app deficiency means that Android is likely to gain significant traction in the 7″ space. This will lead to Android success in the larger tab sizes as well.

      I don’t see how anyone can think that iPad will remain dominant long term. There’s no way that a premium priced system with only one hardware manufacturer can dominate indefinitely. I’ll be very surprised if Apple has more than 20% of the overall tablet market five years from now.