Tablet maker's dilemma: cheap but different

Tablet maker's dilemma: cheap but different

Summary: Like commuters on a crowded subway jostling for a steady position for the trip, OEMs making tablets are looking to grab a good spot in the market, and they face a big dilemma.

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It seems like we've been saying forever that the tablet space is about to heat up, for the simple reason we have. It is getting closer to happening though, as a handful of Android tablets are now hitting the market. Like commuters on a crowded subway jostling for a steady position for the trip, OEMs making tablets are looking to grab a good spot in this budding market, and it's not going to be easy. They are faced with a big dilemma: make tablets very cheaply but different enough from the competition to capture attention. What they are about to discover is these two objectives are mutually exclusive.

Apple set the pricing bar for the iPad, and to the surprise of many set it extremely low. Tablet makers are scrambling to produce competing products at the iPad's entry price point, and in some cases changing strategy to accomplish that. Tablets are viewed by consumers as extra devices and not something they must have, and that makes the price very important. Buying a tablet is much like an impulse purchase, so the price must be low.

The lower the price point the more effort OEMs spend producing tablets with load-outs similar to the iPad to have a chance in the market. This takes the effort away from adding features to new tablets that make them stand out from the crowd. Without special features, tablets are competing solely on price. That is good for consumers, not so much so for tablet makers.

A couple of tablets that add new features to the mix to stand out are the upcoming HTC Flyer and the Asus Transformer. HTC is adding pen input to the standard Android tablet feature set, and Asus is adding a keyboard dock that turns its tablet into a laptop. Both are interesting approaches that add value to the consumer, but also add price to the product. What remains to be seen is if this additional value is recognized by buyers and if they will be willing to pay the price, or if they will pass on the higher cost tablets and go with more traditional products.

We've seen this situation in the past with Tablet PCs that are full laptop computers that add swivel screens allowing operation as slates. These are still available in the market and are good laptops with outstanding pen input features, but they've never penetrated the consumer market in numbers because of the higher price they command due to these extra features. Manufacturers face an extra layer of marketing to convince prospective buyers they are worth a higher price, an effort that so far has failed. It's a catch-22, extra marketing and the cost that goes with it to have a shot at selling the feature to the public, which in turn makes the product less price competitive in the market.

We are seeing the first of the Android tablets hitting the market with pricing that is competitive with the iPad, as companies know the score. So far these tablets all look much the same in the way of hardware and features. While the products appear to be good buys for the consumer, there's not much making one stand out over the others. It's going to turn into a real scramble, with pricing the only attraction to draw in buyers in significant numbers. The dilemma facing tablet makers is going to be evident very soon, and it will be interesting to see how they deal with it.

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Topics: Hardware, Laptops, Mobility, Tablets

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  • RE: Tablet maker's dilemma: cheap but different

    It is a slow rolling snowball right now but the more peopld that see these Tablets playing HD Video or Flash on the web and even classic console games with a controller the more they will catch on.

    Let's face it, the only people who think Apple is the only game in town are those who are fans of the system.

    Now let me say, I don't find the iPad 2 to be a bad device but I don't appreciate the very restrictive control they put on their vendors or the fact that they remove choice from their customers.
    slickjim
    • RE: Tablet maker's dilemma: cheap but different

      @Peter Perry But that is who Apple is and what Apple does. They are making money and have a loyal fanbase so they won't stop doing what is making them money. I agree with you completely though so don't get me wrong there. I think iPad 2 is a great device, but once I get an iPhone 5 to replace my 4, an iPad 2 or 3 just won't be worth it for me. I'll rock an iPhone 5 and an ASUS Transformer for my Android/Tablet needs. I'll have the best of both worlds in my opinion.
      Bates_
      • Yes, and that is precisely why.....

        @Bates_

        they will never get any of MY money. I value my freedom a GREAT DEAL.
        Economister
      • Two ways of looking at the same situation.

        @Economister
        We've talked about this before and the only reason I'm repeating myself is to make sure both sides get an airing. I look upon Apple's policies like I would my hiring a "wilderness guide" this person is the EXPERT of a given area. He/she knows the dangers of the terrain and the wildlife even the plants that are OK to eat and the ones that might make me sick. If I wish to walk off in a direction the guide does not want me to I fully expect said guild to stop me before I walk off a cliff face. Now sure that does upset my freedom but I find freedom is much more enjoyable while I am amongst the living:P I could argue that I do have the skill set to do my own wilderness travel and in my case that is likely true but heck I do that kind of thing for a living and when I play I don't want to be working.

        The simple question is this .... Is my "freedom" limited? I suppose it is I can't really argue against that point. Still to me it's a prison I willingly entered and find myself enjoying so I can't say I feel hindered at all. I understood the terms at the start and found them doable. Now I think many here will find that the average consumer does not want/need/or care about becoming a wilderness guide. They have jobs and tasks that require their time and energy and if they are going to go for a hike they will likely hire someone to guide them rather than take the time to learn the ropes, and be happy for it. I think Apple has got this one right for MOST people not all mind you but many and it's consumer lines have proven that of late.

        Pagan jim
        James Quinn
      • Bad analogy

        @James Quinn<br><br>We are not talking about a wilderness trip. We are talking a trip to the local corner store. I do not need ANY guidance to go there, nor do I want any. If I did go on a wilderness trip I might be seeking all kinds of guidance and hand holding, but this is my every day life activities we are talking about.<br><br>Now if booting your computer seems like the beginning of a wilderness trip, then by all means, get all the hand holding you need, from whomever you trust. And I think Apple is doing a fine job in that regard. There is a huge need for simplicity in computing, but it is generally not for me.
        Economister
      • there's another issue you didn't address

        @James Quinn
        What if the guide stopped you from exploring on your own not because there's a cliff there, instead because he didn't want you to see something he couln't control or profit from, like more interesting trails or even a better guide or camp ground that he can't compete with?

        Maybe Apple wants you in their controlled eccosystem, because venturing outside of it is out of their control, and hard to profit from if you happen to find that there's a better place to shop instead of iTunes?
        Will Farrell
      • RE: Tablet maker's dilemma: cheap but different

        @Bates_ <br><br>I think so long as Apple continues to build devices, there will always be those who feel the need to argue about freedom and choice, for some reason. Give it a break guys, clearly Apple's devices are not for you. They don't seem to have a problem selling to the vast majority of consumers though who made their own choice in going with Apple. My personal reasons for choosing Apple is playing in a tightly integrated ecosystem with the largest selection of curated and quality apps, content. I can't seem to find other stores and platforms that offers me this "choice". <br><br>But the funny thing about Apple's iOS devices is it can also be jailbroken.
        dave95.
      • @Economister: But you through away your privacy at a whim? (nt)

        NO TEXT
        Bruizer
    • RE: Tablet maker's dilemma: cheap but different

      @Peter Perry:

      Agreed. And for me, I'm glad to see more tablets popping up in the major electronics shops. I see tablets like todays laptops --- great to have a machine that I can just fold-up and take with me. Having a data service plan isn't necessary b/c everywhere I go either has WiFi or a physical data access available.

      I want a tablet to keep in the den or the bedroom. A light machine to access the web before bed or just after waking up --- without having to go downstairs, open the laptop, and sit at the table or on the couch.

      It's still a bit of an entertainment-like device for me.
      jlt0x
      • Agree 100% (nt)

        @jlt0x
        Economister
      • RE: Tablet maker's dilemma: cheap but different

        @jlt0x
        For me the ability to do what you mentioned but also open a work email, view a document, note it or highlight it or save a copy for later viewing (in bed with a cup of coffee or...)

        Thats the function at a minimum I want from a tablet.

        iPad - nope
        Android - tbd....

        :(
        rhonin
      • @rhonin: Why not iPad?

        I use it just as you indicate.
        Bruizer
    • RE: Tablet maker's dilemma: cheap but different

      @economister

      freedom eh? unreal.
      sportmac
      • Did you wish to make a point?

        @sportmac

        I am waiting....................
        Economister
    • Get off the Fanboy wagon

      @Peter Perry <br>You seriously think Apple's sales come from fans?? If you think anyone who buys an Apple product is a fan, you are wrong. These people are just everyday consumers who have complicated lives and want a little simplicity. Yes, there are some fanboys of Apple...just like Android has fanboys..(maybe fangeeks if a better word there) but 98% of Apples sales come from Mr. and Ms J. Average.<br><br>So keep on yelling "fanboy fire" while your favorite manufacturer tries to hit the general consumer market...but has a hard time keeping up with Apple.
      thofts
      • Apple sales do come from fans. People who pick up the product

        in the store, try it out and become a fan of it. Fanboy is and always has been nothing more than a tactic to insult the opponent so as to shut down the debate you are losing.
        fr_gough
      • RE: Tablet maker's dilemma: cheap but different

        @thofts have you seen the interviews of people waiting to buy the iPad 2 they all admitted to drinking the kool aid.
        slickjim
      • Oh, and here I thought that &quot;Fanboy&quot; was a term

        @frgough@...
        given to a person that disregards countrpoints and opposing facts in an attempt to bolster their losing position in the debate.

        Silly me.
        John Zern
    • RE: Tablet maker's dilemma: cheap but different

      @Peter Perry I believe what you say may be valid for you but for most consumers freedom and choice isn't about the tech function of the product they choose to purchase. It is about the the actual life freedom they acquire by not having to deal the technical aspect of their stuff.

      I think you could have an argument to this if Apple was not delivering on it's product and services promises, but this simply isn't the case and I think it is fair to say that at this point Apple sets the standards in these areas.

      There is nothing wrong with being a fan of something because admiration is something that is usually earned, by contrast, detractors require no real relationship to the thing they deride.

      I think the "freedom and choice" rhetoric is mostly an advertising ploy, because when you get down to it it doesn't add any real freedom or choice to the user's actual life and curated ecosystems seem to be a better choice if that's the aim.

      You yourself may find value in being able to tinker with your technology choices because you are a technical guy and you enjoy it...there may be even more folks that fancy themselves as techy, but the vast majority of consumers just want stuff to deliver what it promises.
      CowLauncher
    • &quot;Freedom&quot; is a non-problem for me. What am I missing???

      @Peter Perry
      Here's the deal: I own several Apple products, and, quite honestly, don't feel the least bit restricted as far as what I can do with them. There are so many comments about people being down on Apple because they feel Apple is controlling their lives, restricting what they can do with their stuff, etc. As far as controlling their vendors--if that's what it takes to produce a quality product, so what? Seriously--what am I missing?????
      Userama