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Tablets: Cheap, Cheaper & Cheapest

As companies continue to remix their tablet offerings, providing a plethora of sizes and features that suit the market's appetite for these mobile devices, there is now a concerted effort to do battle over price.

Not only will the price equation further exacerbate uncertainty about which company will win the tablet wars, but price competition reveals what many electronics manufactures have already figured out: If they can't compete in the first tier of the tablet market, there is room to grab market share in the second or third tier.

Ever since {complink 2376|Hewlett-Packard Co.} decided to drop the price of its TouchPad tablets and sell the product for $99, which sparked a fire sale one weekend during the summer of 2011, companies have been eying the possibility of offering a tablet with a $99 price tag.

A little over a year ago Lenovo introduced the Lenovo IdeaPad A1 7 inch for $199. We've also had products with fewer features that satisfy the lower end of the market such as the Amazon Kindle Fire, the Google Nexus 7, and the Samsung – Galaxy Tab 2 Tablet. These are products with fewer features such as screen resolution or storage space, but can still satisfy consumers who are looking for a tablet that sells for less than $200.

Now, Asus has introduced its 7-inch tablet, the Memo Pad ME172V, which will ship for $149. Acer has launched the 7-inch Iconia BI tablet in India and reports are that the company plans to introduce this tablet in the US with a $99 price tag. There are also rumors that Google is planning to unveil a $99 Nexus tablet sometime this year.

Let's face it; there is a market for lower-priced tablets. That said, companies like {complink 379|Apple Inc.} and {complink 4751|Samsung Electronics Co. Ltd.} that have cornered the high-end market want as much market share as they can grab, and will be hard pressed to surrender market share to other competitors. The ripple effects of a change in market demand come with other unwanted consequences such as a possible rise in inventory levels as demand slows. Years of planning can be dashed when forecasts don't match the realities of retail sales. Already, Apple is trying to inoculate itself from such disruptions.

The introduction of the iPad Mini, for example, gives Apple the chance to break through the $499 price point of the larger iPad, giving consumers a 7.9-inch tablet at a lower price. However, the 16GB iPad Mini sells for $329, the 32GB model has a price tag of $429, and the 64GB sells for $529. It will be interesting to see if Apple decides to offer tablets below the $200 mark, but for now the company has decided to leave that battle to others in the market.

In the meantime, the slow sales of Microsoft's Surface RT tablet during the Christmas season indicates that the tablet market may not be as strong as many thought. Consumers may have settled on Apple or Samsung for their high-end products, and may not want to entertain another alternative that sells for around the same price and does much the same thing as other competing product. The Surface RT sells for $499 for the 32GB tablet, $599 for the 32GB tablet with a touch cover, and $699 for the 64GB version with touch cover.

As it begins to compete in the tablet market, one wonders if Microsoft might not have fared better if it had introduced a tablet at a lower price. It's always good to remember the lessons of the HP TouchPad when it sold for $99, and the enthusiastic sales that followed.

Price does matter. The question is how low will companies go to offer a price tag that grabs consumers, yet still covers supply chain costs while making a profit? I'm willing to bet we will see much cheaper tablets this year. How companies serving the high-end of the tablet market will react to this new reality is anyone's guess.

38 comments on “Tablets: Cheap, Cheaper & Cheapest

  1. Nemos
    January 17, 2013

    I think now all the companies have to “dance” – follow the rhythm that HP plays with the smart idea to offer its product in lower price.  

  2. _hm
    January 17, 2013

    Tablet hardware and cost is one part. Other part of interest to user is OS and application software. More innovation in this field is required to differentiate one from other and enhance market share.

     

  3. t.alex
    January 17, 2013

    If they drop the price, they have to take it back somewhere else to cover the cost. Apps sales, and content sales are some of the ways. 

    It's quite exciting to see the flexible display tablet coming up from Samsung. Not sure how much it would cost though.

  4. prabhakar_deosthali
    January 17, 2013

    If the tablets are offered at cheaper prices , there is a huge worldwide market in the student community .  In India the government has taken initiative to make tablets popular in student community by giving subsidies – the price after subsidy comes just around equivalent oof around $50 ( Sure it is not a high end version but is sufficient for students).

    The emergence of Phablets will make it idal product for this student community.

  5. Adeniji Kayode
    January 18, 2013

    I am convinced that cheaper price ia s reason why more people will embrace having a tablets. Its becoming a major device to be owned especially if you are educated and you have anything to do with the internet.

  6. Adeniji Kayode
    January 18, 2013

    t.alax,

    You are right, they might make up from apps and accessories.

  7. Cryptoman
    January 18, 2013

    @prabhakar

    I agree with the potential of cheap tablets amongst the student community. Especially the governments in the third world countries are pushing for tablet based education these days. Cheap tablets will allow them to realise their vision of 'high tech education for all' on a low budget. I know that the Turkish government has published a tender for a project called 'FATIH' that aims to provide tablets to every student. The total value of this tender is $3.8 billion and many local companies are already salivating to get a share of the action.

    I personally think this is all a political thing rather than a quest for truly improving the quality of education however, for the cheap tablet manufacturers, this offers a fantastic opportunity to boost their sales.

     

  8. Susan Fourtané
    January 18, 2013

    Nicole, 

    And let's not forget the tablet presented by Sharp at the CES2013. For those who like handwriting notes this tablet is ideal. Not a new concept, though. 

    -Susan 

  9. Susan Fourtané
    January 18, 2013

    Prabhakar, 

    Indeed, that's a very good price for students. With the currency exchange, is the price still very good for students in India? And yes, phablets start gaining territory already. As I mentioned before, phones are in good part walking the path of extintion. 

    -Susan

  10. Susan Fourtané
    January 18, 2013

    Nemos, 

    Yes. Also there are now too many tablets in the market. There are tablets for every need and budget, I would say. 

    -Susan

  11. FLYINGSCOT
    January 18, 2013

    The tablet is the razor and the app is the blade.    Companies make their profit on the blades so I expect that tablets will become cheaper and cheaper.  Free cloud computing and storage will also prevail and when we are all hopeless junkies the service providers will start cranking up the price.

  12. prabhakar_deosthali
    January 19, 2013

    Yes Susanne, $50 is quite an affordable price for students especially in colleges . These students are already ready to pay around $250 for a good smart phone and $250 for a reasonable performance lap-top

    In village schools may be the schools will get some more grant from the govt to buy the tablets .

    The concept of e-books is being popularized where there is a lot of saving of paper based text books.

     

    I believe similar incentives are being offered in other third world countries to popularise the use of tablet like devices instead of paper.

    So overall this market seems to be promising enough for the big player to offer tablets at cheaper prices and make profits on volume and not on margins.

     

  13. Susan Fourtané
    January 19, 2013

    prabhakar, 

    Yes, similar things are happening in Africa, too. As e-Books are gaining more popularity amongst students at all levels so are tablets and eReaders. The role of tablets in education is being of paramount importance these days. 

    -Susan

  14. Adeniji Kayode
    January 19, 2013

    @ susan, That might not be a bad idea so that those that are not used to typing may use the handwriting as alyernative.

  15. SunitaT
    January 20, 2013

    It will be interesting to see if Apple decides to offer tablets below the $200 mark, but for now the company has decided to leave that battle to others in the market.

    @Nicole, thanks for the post. I think eventually Apple will be forced to release tablets below the $200 mark because it is facing stiff competition from Android tablets. Apple has already cut component orders for its iPhone 5 due to slumping demand for the handset.

  16. SunitaT
    January 20, 2013

    As e-Books are gaining more popularity amongst students at all levels so are tablets and eReaders.

    @Susan, I agree with you that tablets and eReaders are gaining popularity but I wonder if students totally rely on these gadgets even to take-down notes then they will forget writing skills because digital-pens are not so user-friendly.

  17. Susan Fourtané
    January 20, 2013

    Adeniji, 

    Those who prefer handwriting have also the option with iPads. I just mentioned the Sharp tablet as one of the latest adds to the tablet options. 

    -Susan

  18. Susan Fourtané
    January 20, 2013

    tirlapur, 

    It's a combination of tablet and laptop what works the best for some. Others take their notes on their tablets, others record the lectures and take notes using the same app. There are wonderful apps for taking notes.

    I don't see any problem with digital pens. I have used digital pens even long before there were discussions about them. Have you tried them to see how you feel using them? Then again, not everyone gets used to the same thing. Some people still have problems with touchscreens. 

    As for forgetting writing skills, there will be a point in the future that writing skills as we know them won't be needed anymore. You can't delay evolution. Writing skills are evolving just as everything else. You can't stop that, or demand today's kids to learn how to write on stone just because some people in the past did once. 

    -Susan 

  19. SunitaT
    January 20, 2013

    Have you tried them to see how you feel using them?

    @Susan, yes I have used digital pens long back but I didn't feel comfortable using them hence I stopped using them. May be I guess latest digital pens offer more resolution and clarity compared to earlier digital pens.

  20. Susan Fourtané
    January 20, 2013

    tirlapur, 

    Yes, the digital pens you can use today have no point of comparison with the older ones. Technology has improved also in the digital pen world. 🙂 Just go to an electronics shop, and try one. You will notice the difference. 

    -Susan 

  21. SunitaT
    January 20, 2013

    As for forgetting writing skills, there will be a point in the future that writing skills as we know them won't be needed anymore.

    @Susan, may be you are right writing will become obselete someday and that is what my concern is. Althought I am avid computer user I still prefer solving, analysing things using paper and pen because it provides me more flexibility. I hope students will not discard using paper/pen just because they have accessibility to latest technology.

  22. Susan Fourtané
    January 20, 2013

    tirlapur, 

    “I hope students will not discard using paper/pen just because they have accessibility to latest technology.”

    I am sorry I will disappoint you on your hope of future generations learning/having the same writing skills you learned, and using paper and pen. They simply won't. 

    The fact is that we are already on the path toward a paperless world. If there will be no paper, there will be no pens. Therefore, it will not be a matter of choice, but rather a matter of using/adapting to the new ways of expression and communication. The future generations will not write on paper, as there will not be any paper on where to write. 

    So, in short, there will not be paper, pens, pencils, but only digital paper and digital pens. This is not science fiction, it's already happening in some parts of the world.  

    -Susan 

  23. t.alex
    January 20, 2013

    For students, would it be better if the government subsidize laptops instead of tablets? 

    With a laptop, they can do whatever a tablet can do and more than that – their assignments as well. With a tablet, the functionality is limited somehow. 

     

  24. SunitaT
    January 20, 2013

    With a laptop, they can do whatever a tablet can do and more than that – their assignments as well. With a tablet, the functionality is limited somehow.

    @t.alex, you are right. Laptop is more useful to the students compared to tablet. Computational power of laptop is far more compared to tablet. Morover the size the of laptop has reduced drastically and is very easy to carry just like a tablet.

  25. SunitaT
    January 20, 2013

    So, in short, there will not be paper, pens, pencils, but only digital paper and digital pens. This is not science fiction, it's already happening in some parts of the world.

    @Susan, yes the trend has already started. I dont deny it. I am just worried if its good for the kids to totally depend on technology.

  26. mfbertozzi
    January 21, 2013

    @t.alex: according to other posts, I am with you; maybe tablet is good for professionals which are impacted by mobilities needs and so on; students usually uses CPUs at home, schools, biblio and mobilities needs are quite limited. We could compare them to nomadic users, instead of mobile users.

  27. Daniel
    January 21, 2013

    Nicole, you are right, most of the companies are offering low cost tablets starting from $99. If companies are slashing the tablets prices like this at one point of time there may be chances that tablets are cheaper than smartphones.

  28. t.alex
    January 21, 2013

    Susan, 

     

    You have a point of paper and pens disappearing in the future. I notice many kids nowadays are playing with games on tablets. They do colouring of objects on tablets instead of on real paper. And by the time they are in primary school, they are already competent in using smart devices and computers.  

  29. bolaji ojo
    January 21, 2013

    Technology is advancing at a pace few ever dreamt possible and the impact is being felt most by the younger generation who may not even be trained on pen and paper to start!

  30. bolaji ojo
    January 21, 2013

    Students don't have to choose. They can have PCS for higher functionalities and tablets for simpler functions.

  31. Anna Young
    January 22, 2013

    Hi Susan/tirlapur, I agree with your assertions. It's increasingly possible to do away with the use of papers, pens and pencils due to accessibility to smartphones, tablets and laptops. I suppose with further price reductions of these items , conventional writing tools might altogether become a thing of the past. Tirlapur, understand your point. The trend dictates. Schools, colleges and University are supporting this transformation.

  32. Anna Young
    January 22, 2013

    @Jacob, I think we might see cheap smartphones as well don't you think? At least we now have smartphones that perform similar functions as tablets and laptops do.

  33. SunitaT
    January 22, 2013

    If companies are slashing the tablets prices like this at one point of time there may be chances that tablets are cheaper than smartphones

    @Jacob, Indian government not only released worlds cheapest tablet (Aakash tablet) but it is also trying to build ecosystem of applications, mainly related to education. This is a very good move by the indian government I hope other countries will take such inititatives to bridge the digital divide.

  34. kilamna
    January 22, 2013

    Sure .. but have you been following WHAT is goiung on with the 'people's tablet'.  Governments rarely can take such initiatives, and succeed. Unfortunately when the effort is processed through private-public 'partnerships' the 'private' makes a financial killing at the cost of public funding, and nothing to show at the end.

  35. The Source
    January 28, 2013

    Susan and Prabhakar,

    I thought of you when I came across this article about tablets for kids. The article says these tablets are priced under $200, and that their features include “bright colors, durable cases and rubberized surfaces.”  

    Susan, the article says these tables will be the next fixation for kids. This is not good news for those of us who want to see our children improve their penmanship.

    Here's the link to the article:

    http://www.wired.com/gadgetlab/2013/01/kids-tablets-ipad/

    Thanks for your comments.

     

  36. Daniel
    January 29, 2013

    “Indian government not only released worlds cheapest tablet (Aakash tablet)”

    Trrlapur, yes I had heard about it and associated controversies. I read that it's a Chinese product with 'Made in India' label. Then ofcource it may much cheaper in China.

  37. Daniel
    January 29, 2013

    “I think we might see cheap smartphones as well don't you think? At least we now have smartphones that perform similar functions as tablets and laptops do”

    Ann, there is no doubt in that. After the introduction of Android based Smartphones, the prices for premium brand Smartphones has slashed considerably. There is no doubt that price may slash further up on the introduction of Ubuntu OS for mobiles & Tablets.

  38. Susan Fourtané
    February 28, 2013

    tirlapur, 

    As long as we can't ask today's kids to learn as if they were in the 20th century yes, it's good that they depend on technology because that's the way it will be from now on. 

    -Susan

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