Where Are the Cheap Tablets?

By  |  Monday, January 24, 2011 at 11:32 am

Motorola’s upcoming Xoom tablet is going to cost $699. Or maybe $799. Both prices are rumors rather than confirmed realities, but they seem to point to the Xoom starting at a much higher price than the iPad, which costs $499 in its most minimalist configuration (16GB of storage and no 3G).

If the Xoom goes for $699–or maybe even $799–it’s not because Motorola has grossly overpriced the thing. Specswise, it’s a far more potent device than the iPad, with a dual-core processor, four times as much RAM (1GB vs. 256GB), a slightly larger screen with more pixels, two cameras vs. no cameras, a MicroSD slot, and a standard 3G data connection that will be upgradable to 4G for free. Motorola clearly decided to err on the side of making the Xoom beefier than the current iPad–an entirely logical strategy given that it will surely compete with an iPad 2 that boasts some of the same specs that it does. But anyone who hasn’t bought an iPad because $499 sounds like a lot of money is even less likely to spring for a Xoom.

Meanwhile, Samsung’s Galaxy Tab has dropped to $549 or $499, depending on the carrier. (You can get one for less if you commit to a two-year data contract, but paying for tablet wireless service every month is a sign you’re a spendthrift, not thrifty.) The Tab is different enough from the iPad that exact price comparisons are tricky–the fact that it’s much smaller, for instance, can be counted either as a plus or a minus depending on your perspective. But it still has the same starting price as an iPad, not a lower one.

Back in the period after the iPad had been announced but before it shipped, it looked like there might be a bevy of alternatives at much lower prices–chipmaker Marvell was even talking about $99 tablets. Hasn’t happened yet, but I still think that there are plenty of people who’d be very interested in, say, a decent $299 tablet.

Why aren’t Apple’s competitors beating the iPad’s price yet? I can think of several reasons:

Maybe the iPad is cheap. Apple’s competitors like to operate under the assumption that Apple caters to style-obsessed cultists and charges them a stiff premium because…well, because it can. But if the iPad price includes obscene profits, you’d think that someone would attempt to gain market share by undercuting it sharply.

Maybe tablet companies don’t think tablets are mainstream yet. It’s standard industry practice to introduce new types of products at high prices–knowing that the earliest of early adopters will cheerfully pay them–and then slash the sticker price to one that less nerdy consumers will find reasonable. Perhaps tablet companies still don’t think tablets are ready for normal folk.

Maybe other companies can’t match Apple’s economies of scale. Apple has sold almost 15 million iPads; Samsung has shipped 1.5 million units of the Galaxy Tab, which is probably the second biggest tablet hit to date. As the Business Insider’s Pascal-Emmanuel Gobry notes, it’s easier to make a nice profit on a product when you buy parts by the gazillion, as Apple does. And 9 to 5 Mac’s Jonny Evans says that Apple is acquiring components in quantities that may make it tough for its rivals to get the parts they need at reasonable prices.

Maybe Apple’s competitors are letting Apple define what a tablet should cost. Some companies that are readying tablets, such as RIM and Toshiba, aren’t talking about prices other than to say that it’ll be “competitive.” For now, “competitive” probably means starting at $499 or thereabouts. But if Apple’s next iPad comes in at $449 or $399, the definition of “competitive” could change quick.

Got any other theories? If you haven’t bought a tablet yet, is there a price that would get you excited?

 
18 Comments


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18 Comments For This Post

  1. morphoyle Says:

    For me to be excited about a tablet, it would need to cost less than a netbook, and offer something in the way of usability that a netbook doesn't provide (beyond a touchscreen).

  2. Luke Says:

    Couldn't agree more!

  3. @jtoeman Says:

    Great post Harry. I think "cheap" in tablets is actually below $250. At $300 you are only $200 away from an iPad, in which case… get an iPad. But the problem with cheap tablets is either (1) they *are* cheap (AKA crappy) or (2) they are subsidized, and consumers don't want to buy devices (other than phones) with a monthly fee.

    So my hunch? Don't expect many cheap tablets anytime soon.

  4. Matthew Ogborne Says:

    Hi Harry,

    I think you're right, the manufacturers will follow Apples lead for the second generation of tablets that appear.

    Matthew

  5. Dave Says:

    Rooted Nook Color $250

  6. Mike Cerm Says:

    If the first thing you have to do after buying a tablet is "fix it", then why bother? Also, Skype won't work on the Nook Color (no mic input), so it's not even all that useful.

  7. Dave Says:

    Becuase it's not marketed as a tablet so this is a great steal. iI you are too lazy to take 5 minutes to one click root the nook then you deserve to pay $500.

  8. Mike Cerm Says:

    If I could have gotten a Galaxy Tab, unsubsidized, a few months ago for $300, I definitely would have. Now that Samsung has had some time to show that they don't stand behind any of their products (their 6 month old phones are all STILL running a year-old version of Android), I wouldn't by anything from them. I also wouldn't buy any Android device that wasn't currently shipping with Gingerbread, with a guarantee that Honeycomb would be made available immediately upon release. Since that won't happen, I won't be buying any Android tablet.

    I'll consider getting a WebOS tablet in a few months, but only if it's under $400 (which is what I paid for my CULV laptop), and only if Skype releases an app for WebOS. It will still be a tough sell, since can't take the place of either my phone or my laptop, but at least I'll consider it.

  9. nick dafo Says:

    i have the galaxy tab and found the price great. concerning cheaper tablets, they will come !

  10. Angel Ortega Says:

    What are you talking about? I bought here (in Spain, where electronic appliances are always overpriced) an Archos 7 Home Tablet for 149 euro. It's not a high power machine and comes with Android 1.6, but it's a pretty decent piece of hardware for ebooking, multimedia and Internet usage.

  11. James Says:

    This is BS!

    There are tons of cheap android tablets, most are rubbish, some are even worse than rubbish, but there are some good ones, and the situations getting better.

    The new 10″ Archos comes with 2.2 and is only about ¬£260 here in the UK, half the price of the cheapest ipad.

    With honeycomb now out it can only get better.

  12. samirsshah Says:

    Harry you are very right.

  13. samirsshah Says:

    And I disagree about Xoom. It is wayyyyy overpriced. Xoom's competition is iPad 2 and NOT iPad 1.
    What Motorola is doing reminds me very much of one company across the pond. I have been telling Microsoft but it applies equally well to Motorola, you have to be "irrationally aggressive" fighting Apple. You have to go for broke.

    Why it takes so long for companies to respond to Apple? PlayBook, Xoom whatever..Only Samsung had something at least that could stand against the iPad without being shamed and others absent for a long long time.

    Google usually is very nimble with Android but she even took a lot of time.

  14. steveymacjr Says:

    How can the Xoom be overpriced, when it costs less than a similarly spec'd iPad…

  15. Solo Says:

    You may not need to root the nook color soon, they do plan on updating it to 2.2 and adding a store. At that point, it will be a pretty good tablet.

  16. Patrick Says:

    I have three observations regarding other products that compete in other markets that is closely related to tablets.

    eReaders:
    1. The nook color priced at $250 is a relatively good eReader / browser / tablet, even though it is aimed at being an eReader. It runs on Android and is one of the few products that has my attention at that price point. Barns and Nobel may have been trying to compete with the Kindle, but unwittingly showed us all what tablets could be priced at to compete.

    Smartphones:
    2. Most smartphones are shown in the 399 – 600 price range, unlocked and without a contract. It is assumed that this is the price of the phone. But I have always suspected the carriers to inflate this price just to make the two year contract price more appealing. That, in and of itself says nothing. But compare it to this…

    3. The newly released LG Optimus V phone for Virgin Mobile (no contract) is priced at $150 and it is a relatively good smartphone/PDA. The android 2.2 phone, while not top of the stats charts, does show it can used as an outstanding PDA / browser / apps, even if you don't activate it at Virgin Mobile. The Voice Action apps are outstanding and with the choice of so many free android apps, it is appealing. This smartphone, while not a tablet, does show that you can get good hardware that runs very smooth at a reasonable price.

    With these three observations, regardless of the hardware and pricing, you can argue that a relatively good tablet can be made at a very reasonable price of $300 or even lower.

  17. randy holland Says:

    Price is a major issue, but specs as they relate to price are more important. Let's face it, 3g is on its deathbed and I say good riddance. Bandwidth has been over priced and under powered for years and we are just recently seeing real improvements. I have never been pleased with a 3g connection, but all indications are that 4g will get the job done. And what about a camera? Won’t a primary use for a tablet be video chat? Why wasn’t apple told. And what about power in general? I use dual core laptops, desktops and my big cable company access at home tested to 15/6. It’s over priced but its fast and I can’t imagine accepting something that does not perform close, at least for browsing. So how do you backup 10 years when you know the technology is there to do better? You don’t. You wait for the second generation, 4g, high def, dual core monster to be released and fulltime internet access begins to make sense. Looks like its almost here!

  18. Kevin Says:

    Alot of chinese manufacturers sell cheap tablets that have the same hardware specs as the popular top of the line models. The prices are alot cheaper because the company doesn't have to spend on brand development and marketing. Most of these tablets can be bought from chinese online stores. You can find an overview of chinese online stores http://www.cheap-asia.com