This Android Tablet Is Doomed

Just a few weeks ago, fellow Fool Anders Bylund and I waged a full-scale Fool Duel. I argued that ARM Holdings (Nasdaq: ARMH  ) was the way to go in mobile chips and MIPS Technologies (Nasdaq: MIPS  ) was doomed with its low-end strategy, while Anders presented the flip side of that coin.

MIPS' strategy is to come in from below with pocketbook-friendly Google (Nasdaq: GOOG  ) Android offerings, the most prominent of which is the Ainovo Novo 7 tablet sporting a MIPS-based Ingenic processor. The Novo 7 Basic can be had for $99, which is about half the $199 price tag of Amazon.com's (Nasdaq: AMZN  ) Kindle Fire, which carries an ARM-based chip from Texas Instruments (NYSE: TXN  ) .

A few early reviews are coming in for the Novo 7; can it hold a candle to Amazon's Fire? Can MIPS invade ARM's turf from below?

Stack up!
If you've never heard of Ainovo before, don't feel out of touch. Ainovo is an OEM that has primarily focused on the Chinese market but now has high hopes of tapping into the U.S. with its latest batch of Android devices.

The Novo 7 is aggressively being marketed as "The first Android 4.0 tablet in the world," although technically that title goes to the Asus Transformer Prime, thanks to an over-the-air software update in early January. That tablet also happens to carry NVIDIA's ARM-based quad-core Tegra 3. The Transformer Prime is out of the Novo 7's (and the Fire's) league in every department, so a comparison with the Fire is more appropriate.

Sources: Ainovo.com, Amazon.com, iFixit.com.

  Novo 7 Basic Kindle Fire
Android version 4.0 Modified 2.3
Processor 1 GHz MIPS-based single-core Ingenic JZ4770 1 GHz ARM-based dual-core TI OMAP 4430
Camera Front: 0.3-megapixel; rear: 2.0-megapixel None
Screen 7-inch LED-Backlit 7-inch with in-plane switching (IPS)
Resolution 800 x 480 1024 x 600
Size 187.5mm x 112mm x 12mm 190mm x 120mm x 11.4mm
Weight 580 g 413 g

Sources: Ainovo.com, Amazon.com, iFixit.com.

Just by looking at the hardware specs, you can immediately see all the corners that were cut to reach that magical two-digit price point. The MIPS-based Ingenic processor is only single-core and is built on a 65-nanometer process: less processing power and larger than the ARM-based TI 45-nanometer chip.

The screen resolution is much lower than the Fire's, and while the overall device's size is pretty comparable for both tablets, the Novo 7 is about 40% heavier. It technically trumps the Fire in the camera department, but the cameras are so low in quality that they're not even worth using, neutering that advantage.

How sweet is Ice Cream Sandwich?
With all the hubbub about Android 4.0, or Ice Cream Sandwich, does the Novo 7 trump the Fire in the software arena? Unfortunately for prospective Novo 7 buyers, this gadget doesn't even have full access to the Android market or many of Google's most popular first-party apps like Gmail. So while the device boasts Android 4.0, it delivers an incredibly handicapped experience.

Engadget got its hands on the Novo 7 Basic and found the overall experience downright disappointing. Here are just some excerpts that speak for themselves:

  • Hardware: "There's no beating around this bush: You're getting what you pay for, and in this case, the Novo 7 Basic's body underwhelms."
  • Screen: "Stark loss of contrast, poor viewing angles, and a glare-prone screen? Yes, these three dings conspire to make the slate's visual accessibility a less-than-palatable experience."
  • Software: "In the event you didn't register this tidbit the first few times we mentioned it, we'll remind you once more that Ainovo's tab has been stripped of all essential Googleness -- most distressingly, Gmail account integration."
  • Cameras: "In truth, you should overlook its optical abilities altogether." "We'd like to call this 2 megapixel rear module workable, but even that is far too much of a compliment. Your phone is likely far better suited to photography than this thing."
  • Conclusion: "Yes, $99 is an irresistible prospect on paper, but for an extra Benjamin you can have dual cores, a solid (if unoriginal) chassis, dependable performance, and a direct line to Amazon's retail and content hub."

If you think I'm taking those tidbits out of context, feel free to check out the review yourself and tell me you don't come away entirely uninspired.

Back off, MIPS
Sorry, MIPS, but there's little to no room to squeeze into the Android arena below the Kindle Fire and its ARM processor. The only tablets in the $100 ballpark that sell well are ones that are on their deathbeds (even that one ran on a Qualcomm ARM-based Snapdragon) or ones that are meant for toddlers. Intel is the only chip player that has the resources and perseverance to present a challenge to ARM in mobile.

MIPS saw revenue shrink by 30% last quarter, and gadgets like the Novo 7 hardly lay out the case for a turnaround. I've said it before, and I'll say it again: MIPS will underperform.

MIPS is definitely not a top stock for 2012. The good news is that you can find out what company is The Motley Fool's Top Stock for 2012 by checking out this new special free report. This report comes directly from the desk of our chief investment officer, and it names a company that is poised to reap benefits in emerging markets and utilizes the same business model of two retail titans you probably visit every week. Check out the free report now.

Fool contributor Evan Niu has sold bullish put spreads on Qualcomm. He owns shares of ARM Holdings and Amazon.com, but he holds no other position in any company mentioned. Check out his holdings and a short bio. The Motley Fool owns shares of Intel, Texas Instruments, Qualcomm, Amazon.com, and Google. Motley Fool newsletter services have recommended buying shares of NVIDIA, Intel, Amazon.com, and Google and writing puts in NVIDIA. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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