Why iPad is Still The Cheapest Tablet Computer

This post was originally written in Feb 2011- when Steve Jobs was alive. Sadly, whatever I wrote about Android tablets in that post is STILL true in December 2011.

While you can now buy a decent Android tablet with OS version 3 or above (Honeycomb or Ice Cream Sandwich) for less than the iPad, the price differential is still not enough to sway most potential buyers towards them. Obviously the managers at Samsung, Motorola, Acer and Asus still want almost the same profit margin as the iPad.

Unless they can market an iPad equivalent tablet for 65 % of the price- they are doomed to remain minor players in that market segment. The funny thing is that most 10″ tablets can now be manufactured for between 220-250$, making a final price of 300-350$ profitable.
—–

Have you ever wondered:

Why is the iPad still the cheapest tablet computer?

If you don’t believe me, have a look at competing tablets with similar specs..

High Prices Threaten to Kill Tablet Adoption

For a brief few hours over the weekend, rumors flew that the Motorola Xoom tablet would be priced at $1199, at least at BestBuy. However, the pre-order page in question soon disappeared and experts went back to suggesting the Xoom will “only” cost $800 (although we still have no official confirmation).

The cheapest iPad rolls in at $499, and goes up to $829 if you want top of the range. To avoid two-year contracts, the Galaxy Tab will set you back around $600. There are rumors the RIM PlayBook might be priced around $500, which would position it against the cheapest iPad. That’s a step in the right direction but still far from being a guilt-free purchase for anybody other than Arab sheikhs.

and here is another article in the same vein

Why Nobody Can Match the iPad’s Price

Isn’t that a billion dollar question, especially given Apples history of selling expensive products. Of course, the article then goes on say..

Jason Hiner of Tech Republic suggests it largely has to do with Apple’s retail strategy. Apple now has 300 retail stores worldwide selling iPads directly to customers. That’s advantageous, because if the iPad were primarily sold at third-party retail stores, a big chunk of profit would go to those retailers, Hiner reasons.

Bullshit! All of these overpaid pundits are missing the obvious and plain reason, partly because their limited minds cannot conceptualize the real reason.

iOS based devices have been marketed using a different strategy from other previous, and current, Apple products. They are true consumer devices meant for mass consumption and market domination. Unlike previous apple products, they are not meant to demonstrate your SWPL tastes. Because of their total domination in their respective market categories, Apple can do something it cannot do with its other products- accept a smaller margin and percentage of profit than it is expected from it.

The management of manufacturers of similar devices, from Motorola to Samsung,are making a very serious mistake. They are trying to generate numbers for predicted profit by selling arguably inferior products for about the same or more. Many readers might think that “high IQ” management and decision makers in companies are not stupid short-sighted morons. However observation of the real world suggests that bad management decisions are behind the vast majority of corporate failures.

Apple has Steve Jobs, at least for the time being and face it- He IS Apple.

Companies such as Motorola and Samsung have equally brilliant engineers, but piss-poor management. These companies are run by people who have no vision, no ability and no competence who are constantly engaged in petty power plays. Of course, they have ivy league educations, the right last names and connections. However making things work well in the real world requires competence, vision and dedication to the cause.

Comments?

  1. JG
    February 19, 2011 at 5:45 am

    I won’t even look at a competing tablet unless it’s at least $100 lower than the IPad and even at that price I still would buy the IPad because of the massive number of applications for it. Perhaps there’s a few techno-geeks who will pay for the differences in the new tablets but not being one myself, IPad meets everything I want from a tablet and more. If the competitor’s not at least 20% lower in price, there’s no decision for me to make, it will be IPad.

  2. Brock
    February 20, 2011 at 7:26 am

    The iPad is cheaper because of the cross-subsidy from the App Store. Apple makes 30% on every piece of software and media sold on an iPhone and or iPad. They can sell the hardware at cost and still make money hand over fist.

  1. February 20, 2011 at 3:06 am

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