Tuesday, February 22, 2011

The one big reason why iPad rivals can’t compete on price

The one big reason why iPad rivals can’t compete on price, article.

More and more reasons are coming in about why it's nearly impossible for Apple's competitors to compete with Apple in the tablet market. This guy says it's the high profits of direct sales through the Apple Stores.  Fascinating stuff anyhow.

I have a Samsung Galaxy Tab 7-inch, and it's a very good device. But it costs the same as the iPad, and it really is not worth that, it should be around 70% of that.

By the way, I wonder why Apple started off with such a low price ($500 entry price) on the iPad? They had the market to themselves, and it would still have sold like hot cakes at $700 or even $800, and they could just have lowered the price later, like they did with the iPhone. (Though perhaps not as soon and dramatically as they did with the iPhone, which ticked off early customers fiercely.)

4 comments:

Alex said...

Maybe it's a case of "once bitten, twice shy". Remember when they launched that phone a few years ago and dropped the price in a few months, then had to give cash back to the early adopters.

Also, set the price low enough you'll get more takers, and if your stuff is good enough, then the competition will be scrabbling to catch up and make a profit.

Mirek said...

The one reason why Apple started with agressive price is to disqualify competition. Plenty of strong statements but no one could match it so far. As for the article - I can't help but wonder whether these experts expect that a product like iPad (or any other tablet) would just get developped by itself, whet talking the "profits" based on component cost. Unless of course the cost of development is not hiden under "additional overhead".

Stephen A said...

The problem is one of classification. The iPad is an expensive luxury tablet. The logic goes:
-Tablets are expensive
-Thus you can only have one tablet
-The tablet thus must do everything
-The tablet must also be an iPad killer.
-As a result we must pack the tablet with expensive processors memory and batteries resulting in an expensive and heavy system.

There are plenty of sub $300 and sub $200 tablets which are excellent if they fit your needs. For example I have a $250 Nook Color which, once rooted, is a spectacular tablet. I have a 'Telepad' (a.k.a. Badpad) 10.1" which, other than crappy battery life is splendid, particularly since it is very thin and light.
But since they are "cheap" tablets they cannot be considered iPad competition. I'd like to put forth a cheap tablet manifesto:
-Cheap tablets are cheap
-You can have several tablets for less than the price of an iPad.
-With multiple tablets each can fulfill a different role(big 10" for home, 7" for travel, 5" for your pocket).
-As a result none of them have to do everything.
-Each tablet can be optimized for its specific role.
-The cost is low so you can take chances and experiment.

Basically this views spending too much on a Rolex watch as inferior to having a good Casio, a Timex and a few Swatches.

eolake said...

Good points.

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For reading I'd like something the size and weight of the Kindle 3, only with the screen contrast and resolution of the iPhone 4. Yummy.