Why Wi-Fi only tablets are rare: Brilliant iPad pricing

When Apple launched the iPad last year many were surprised at the aggressive pricing. This pricing strategy has proven to be brilliant, and forced competitors to look to carrier subsidies to get pricing low enough to generate sales. This is why we don't see too many Wi-Fi only tablets hitting store shelves even though most companies announce them at launch. The reality is they cannot sell them cheaply enough to both compete with the iPad and make a profit.

I am convinced this is why the Wi-Fi only model of the Samsung Galaxy Tab has yet to see the light of day. Samsung launched the 3G models first, to get carriers onboard with their subsidized pricing. The strategy worked for Samsung, with decent sales numbers as a result. But this created a bit of a dilemma for Samsung in regards to the Wi-Fi only model, as it can't sell them cheaply enough to seriously compete with the iPad's good pricing and still make a profit. This is why the Wi-Fi only model of the Galaxy Tab is nowhere to be found. The unit price would likely be way too high to compete with the iPad, and Samsung would be left with egg on its face.

This is why tablets being announced this week at the Mobile World Congress are too expensive to get consumer's dollars. Take away the carrier subsidy and these things are hundreds of dollars too high to generate a sales volume necessary to make a product successful. Tablet makers are between a rock and hard place, and they have been put there by a brilliant strategy by Apple.