It's too late for the late-comers to try to redefine tablet pricing

It's too late for the late-comers to try to redefine tablet pricing

Summary: Insanity seems to have gripped tablet makers, with the latest batch of 'Honeycomb' Android tablets being prices at an eye-watering +$1,000.

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Insanity seems to have gripped tablet makers, with the latest batch of 'Honeycomb' Android tablets being prices at an eye-watering +$1,000.

It's rumored that Motorola XOOM will retail for a staggering $1,199, while LG is pricing the Optimus tablet in Europe at €999 ($1,350 inc sales tax of 20%, making the tablet a shade over $1,000).

Ummm, it's too late for the late-comers to the tablet market to start trying to redefine price. Sure, these devices feature a dual-core processor, but the PC market proved that consumers didn't care about cores or megahertz/gigahertz. Consumers focused to an array of price points. Apple defined the tablet market within the $499 to $829 price band, and trying to go outside of this envelope (even with better hardware than a year-old iPad) is suicide for a device. In fact, this enthusiasm with stratospheric price tags could be suicide for the budding Android tablet market.

Motorola and LG had their chance (like everyone else) to define the tablet market and set price points, but it failed to take advantage of the opportunity, leaving the market wide open for Apple define it.

So, Motorola and LG, good luck with those tablets ... you'll need it!

[UPDATE: My ZDNet blogging colleague James Kendrick agrees with me:

"Is the problem that vendors are cramming too many high-cost components (or features) in tablets to try to stand out? If so that is a strategy doomed to failure, as it prices the device out of the range consumers will be willing to pay."

The market's already been defined. OEMs need to roll with this to survive.]

Topics: Laptops, Hardware, Mobility, Tablets

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27 comments
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  • And, what if

    Apple continues to sell the iPad 1 after the iPad 2 comes out?
    At a new lower price of $399.
    Oops.
    davebarnes
    • Oops is right

      My guess is that Moto et. al. are "inviting" Apple to a higher-priced dance by pre-announcing these devices before they are ready to ship. They all know that Apple is probably holding pricing meetings on the iPad2, finalizing how the iPad2 models will be priced. If they can talk Apple into raising the price of the iPad2, they'll be in much better shape, because the way it stands now they'll be lucky to break even. The attractiveness of such a move to Apple is an even higher margin than they have already.

      I don't think Apple will go for it. They have the component volume and distribution juice to keep the iPad pricing where it is even as they add better processors and more features. Doing so makes it virtually impossible for anyone else to compete with them on price and still turn a profit. If you're steering Apple and you have the opportunity to shoot the competitors' babies in their cribs, why not do it?
      Robert Hahn
      • Agreed

        @Robert Hahn

        Apple won't bite. Apple has set the tone and the price here. It'll be able to add features and maintain a price point that it feels is appropriate because no one will be able to match it, and even if they could undercut Apple on price they could never touch Apple's production capabilities.
        oncall
  • These high tablet prices fail

    The Xoom tablet, a device with 1GB of memory for $1350? Are tablet manufacturers crazy? With $649.99 you can get a HP Pavilion dm1z Notebook PC with AMD Fusion dual Core 1.6Ghz CPU, 500GB HD, 8GB Memory and a screen of 11.6 inches, integrated ATI Radeon HD 6310 graphics, 9.5 hours of battery, HDMI, VGA, Bluetooth connectivity.
    Gabriel Hernandez
    • In defense of all tablets....

      @Gabriel Hernandez
      .... you can not blindly compare specs of established laptops to a tablet. Back in the good old days, before the iPad, you could, since a tablet was just a laptop that you could flip around and run the exact same programs on it. Judging by sales, people chose the traditional laptop over these tablet PC's. Ever since Apple redefined the market however, a tablet is not a laptop and miniaturization, battery life, capacitive screens etc. have a certain cost attached to them as many are now finding out.
      Conclusion: If you want to do the traditional things, like Word, Excel, you should stick with a laptop or a desktop with a good ergonomic chair.
      On the other hand if you want to casually browse webpages and do some light computing on the sofa or your patio then a tablet is for you. And with the right app, it can also become an ultramobile productivity tool.
      MG537-23482538203179240121698430309828
      • RE: It's too late for the late-comers to try to redefine tablet pricing

        @MG537
        I think his point is still valid, as Microsoft says that in order to be a table it must run a full copy of Windows 7. So there are currently two schools of thought at play here.
        1) Tablets are in between devices (iPad, some of the Android offerings) thus do not need a full blown OS. This seems to be working out quite well.

        2) Tablets are nothing more than Netbooks, thus need a full OS (Microsoft only). These devices need hardware specs that are much higher than the other groups thinks. With the higher specs, the price goes up.
        Rick_K
      • RE: It's too late for the late-comers to try to redefine tablet pricing

        @MG537
        "With the higher specs, the price goes up."
        And the sales go down. WAY DOWN.
        Synthmeister
    • you can make the same stupid argument for desktops vs laptops..

      @Gabriel Hernandez.. you pay a premium for portability, miniaturization and convenience.. that's how it works.. that's how it works..
      doctorSpoc
  • Are these prices fact or rumour?

    If true, then I agree with you, they lost the consumer market for sure and very likely the enterprise market as well.
    On the other hand we'll just have to wait and see when they actually do release them.
    MG537-23482538203179240121698430309828
    • The Xoom price was on BB's web site

      @MG537

      But may have been a place holder.
      Bruizer
  • Trying to beat Apple on hardware is a losing proposition.

    I think the logic is that other tablets can't compete on price at Apple's specs, they just can't source those components as cheap, so they're going higher-end, hoping that impressive stats will make people "come out da pocket." The problem is like you say, most consumers don't care about specs, they care about how well (read: easily) a device does what they want it to, as well as how "cool" it is. Apple with it's complete control of the ecosystem and the Jobs/Ives industrial design aesthetic can't be beat in either category.
    matthew_maurice
  • Latecomers?

    Adi, the Linux/Android Tablet market is in its infancy.
    It really only began to 'take off' in the 4th quarter of 2010 along with smartphone sales.

    Bueller?
    Dietrich T. Schmitz, ~ Your Linux Advocate
    • And it will come to a screeching halt with those prices.

      @Dietrich T. Schmitz, Your Linux Advocate How could they possibly think they could outsell the iPads at prices that are MORE than the highest priced iPad?
      athynz
    • Android tablets never "took off"

      @Dietrich T. Schmitz, Your Linux Advocate

      The sell thu based on return rates to vendors, return rates to Samsung and Samsung shipments to vendors is sad.
      Bruizer
    • RE: It's too late for the late-comers to try to redefine tablet pricing

      @Dietrich T. Schmitz, Your Linux Advocate
      Doesn't matter whether they're in infancy or adulthood, they have got to be within spitting distance of the iPad prices.
      Synthmeister
  • RE: It's too late for the late-comers to try to redefine tablet pricing

    Why don't they redefine it by going lower instead of higher on tablets? The fad needs to end.
    Loverock Davidson
  • RE: It's too late for the late-comers to try to redefine tablet pricing

    There are tons of low-end Android tablets out there if you want one. They are cheaper with cheaper components.

    I like choice.
    Droid101
    • They are, in general, pretty awful.

      @Droid101
      I want a capacitive screen, 7", Android 2.2 (or higher), 512Ram (minimum), good WiFi, SD card slot, decent build quality and $200. That's it. The current Archos comes closest but the build quality is "meh" according to reviewers and only 256 ram.

      There are none out there with those specs (unsubsidized, I don't want to be handcuffed to a carrier). The manufacturer that does the above will own the low end market. The Xoom may well be on steroids and super nice, but it won't be 5 to 6 times better than the specs above.

      TripleII
      TripleII-21189418044173169409978279405827
  • But... but...

    They have USB ports for crying out loud!!! And one has a barometer! I mean who in their right mind cannot use one of those universally handy items?

    LOL, OK I'll stop.
    oncall
    • About those USB and HDMI ports

      @oncall
      According to Engadget's review of this gen 2 Samsung Tab, this new tablet does not have those I/O ports. From that review, "...Surrounding the tablet you'll find a SIM slot, 3.5mm jack, and Samsung's proprietary charging cable. Sadly, there's no USB or HDMI ports."

      You know, oncall, I haven't read any outraged rants regarding those hardware omissions from the pro Android supporters that post on ZDNet. I guess they need to apologize to Apple on that topic, eh?
      kenosha77a