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Bix

How the heck did Apple become the low price tablet company among the major manufacturers?

Everyone else is hitting higher price points, which is the opposite of how things usually go with Apple. Why is this suddenly the opposite of how things have gone with Apple's computers and PMPs? The Archos tablets are looking like busts for now. The best budget alternative to the iPad right to root a loss leader color e-book reader that may never have certain features like cameras and whatnot. If nobody equals or undercuts the iPad's $500 entry price, then Apple will obliterate the competition in a way that makes the iPod's dominance look like nothing.

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20 replies
mrk

Well, while everyone else was shipping 3-year-old laptops and calling them "netbooks" Apple spent a load of money on R&D to develop what certainly seems to be the evolution of personal computing.

It will be a year or two before the competition catches up.

Right now the major players seem to be aiming at producing premium products that will best the iPad. This strategy cannot succeed. Apple IS the best at this - they are the king of the premium brand. They are only weak at the bottom - a Nook running Honeycomb is an example - not the best experience, but for $250 it doesn't have to be.

And you may call me crazy but I believe the biggest challenge will come from HP. No one else can control the OS, Hardware and Platform Store the way Apple does. A lot of people assert that Apple is successful in spite of what they do. In this case they are successful because of what they do.
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Falcon

No one else can put real pressure on price like HP can - they have the scale and the ability to produce products at lower costs. If they don't aggressively price the Touchpad they will be in deep trouble.

Impressively, Apple now has a premium brand name and the cheapest price in this space. That is going to be a very tough nut to crack.
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peter

I think you're right here. If HP can't bring its massive supply chain expertise to bear in producing an affordable tablet there was really no point in buying Palm.

They don't get a lot of credit for it, but Apple has invested a lot in their supply chain over the past few years and it's helped them drive down the cost of producing stuff like the iPhone and iPad.
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SmirfJerker

I agree on all points, that is all.
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dave

Yeah, you make some excellent points!

It'll be interesting to see how HP does. They now control the entire process -- hardware to software (at least for mobile devices) and should be able to pose an interesting challenge to Apple. If they can get their price points to be more comparable, I think it's going to get really interesting!
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phi

Not for long! If HP brings webOS to PCs, then they are definitely trying to move to the Apple business model to control the whole experience. I'm curious to see what the HP line will look like a year from now.

To stay on topic though, the problem with most of these manufacturers is they want to differentiate their tablets from others, so they throw in stupid gimmicks like 3D which ultimately drive up the price. Give me an equivalently spec'd tablet to the iPad for the same price with maybe the addition of a front facing camera and have it run Android/webOS/QNX and I'd be pretty happy.
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Bix

With the Blackberry Playbook also retailing for $500, is that sort of saying they have the same advantages as Apple?
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majipoor

The PlayBook is a 7" tablet which probably helps at keeping the price lower.
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AndrewL9008

Some people are explaining this with the argument that apple has crazy economies of scale with all their components, obviously because 4 of their main product lines are all using essentially the same parts, and they sell soooo many units. This is a good explanation, but I don't know if I buy it completely. I may be wrong, but it doesn't seem like this alone could cause the other tablets to cost hundreds more at retail. All these device makers are getting their components from the same place at the end of the day.
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qyiet

To go with economy of scale is that apple is also selling lower spec devices. As well as missing the cameras, and ports they are much lower speced in RAM, and in most cases CPU as well.

The of the devices BIX linked at the top of the thread the iPad has somewhere between 1/2 and 1/4 the ram. CPU is harder to compare, but 1GHZ dual core CPUs are going to run rings around the A4.

It's impressive that apple has a device that performs as well as it does given it's specs, and I think that raw numbers are not going to sway people with these new tablets as much as 'feel' does. So it's hard to tell if the extra hardware grunt thats been applied here will give better performance for the average user.
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Bix

Well, the iPad 2 will have a camera or cameras and there's no way the price is going up.

So is iOS more efficent than Android or is there more to it?

At any rate, you're right, the raw numbers will only impress hardcore geeks, who still think the Xoom is too expensive. That said, even with its issues, how is the Notion Ink Adam undercutting everyone with so few units?

Everyone that's not Apple has a long road ahead of them.
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qyiet

My position is that the iPad and iOS in general are not more efficient, just force the device to do less at the OS level.

Its where other tablets could potentially gain a lot, the poor implimentation of multitasking on the iPad makes it less useful, but most users don't 'see' the loss. It's easier to not care about this in the pocket size devices like the iPhone. But it hurts the usefulness of tablets. WebOS could be a big winner because of its reportedly good multitasking.

I was wasn't familiar with the Notion Ink Adam, that looks sweet apart from the Android 2.2. If that thing got honeycomb I don't see how some of these others are going to compete.
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Dpmt

When that thing gets honeycomb you mean. Because Notion Ink knows they won't sell much in the mainstream without honeycomb and market.

notionink.wordpress.com­/2011­/02­/13­/little­-deeper­-i...
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Jolly1976

I believe that Apple is trying to recoup their money with apps, since you can't really do much with the ipad when if come out of the box. To make an ipod/ipad close to as featured as Windows 7 you have to buy a lot of apps. Even then, you have a less featured product. You have to have "workarounds" for just about everything...like saving a file. I am still trying to figure out why people are purchasig this product. I guess it is for ipod owners that have always wanted an Apple computer, but didn't want to spend so much on a Macbook. I like that some of these new tablets can run actual programs, such as AutoCAD Civil 3d. It is very nice! I guess if all you do is blog and check twitter all day, the ipad is great.
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dave

"I believe that Apple is trying to recoup their money with apps, since you can't really do much with the ipad when if come out of the box."

Hah, that's not entirely true. Here's a chart from early 2010 showing where Apple's revenue comes from: www.businessinsider.com­/chart­-of­-the­-day­-in­-case­-y...

See that thin orange line that represents iTunes? That's how much revenue they get from apps and iTunes music combined. For every iPhone or iPad they sell you, Apple is making something like $200 - $400 in raw profit because their margins are huge. An iPhone costs $180 or so to build, right? And they sell it to you (or your carrier, who subsidizes the cost for you) for something like $700!

How many apps would you have to buy from Apple for them to make the same amount of money off you (after taking in their 30% cut)? You'd have to buy $600 - $1200 in apps (!!!).
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qyiet

If you are interested in AutoCAD you may be interested to know that you can actually do some basic edits to DWGs on the iPad using AutoCAD WS check out www.autocadws.com for details.

Its definately more of a viewer than an editor, and in no way a replacement for something like Civil 3D, but then I woudn't want to run somthing that hefty on almost any tablet on the market.

You'd probably be better using something like RDP + a VPN to get back to a nice powerful workstation back in the office for actual editing.
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Jolly1976

I actually use Civil 3d on mine right now. I don't like the ipad at all. One of the people I work with was trying it on his ipad and didn't like all of the hoops he had to go through. I don't use my tablet for heavy surface files though. It does work quiet nice though. That and having outlook to email my files is great. Those are things I just can't do on an ipad or an android tablet.

To Dave.....I guess I was wrong about that. Hrmph
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richardlawler

First, is Apple the low price tablet company?

I suspect the competitors who are on the ground (which is really just Samsung and Motorola at this point) are only trying to match Apple's retail prices. (Galaxy Tab 3G is currently $500 after 3 months at $600 vs iPad 3G at $630; Motorola Xoom at $799 vs iPad 3G 32 at $730).

The iPad competitors are probably production and resource constrained. They have little interest in playing spoiler with low-ball prices at this early point in the game.

Beyond R&D, think about what a tablet vendor has to set up in terms of retail distribution and support all over the world. They have to be able to forecast production. They have to have some sense of the market's price sensitivity.

Now look at what Samsung has been doing with the Galaxy Tab. First they decided to piggyback off the cellular carrier distribution channels rather than pure retail. They used existing cellular channels to launch the product worldwide. They sold OEM versions on five different US cell carriers. There's some controversy about how many units they sold, but my intel indicates that it's several million (close to 20% of iPad). (Analytics showed Galaxy Tab as the #3 selling new Android device in December.) Consider all that advanced recon.

Then let's look at cost. There's a $60 difference between the Galaxy Tab and the iPad 3G. iSuppli's teardown showed the Galaxy Tab has a bill-of-materials of $205 ($215 with manufacturing). iPad 3G has a $265 BOM ($275 with manufacturing). The two key differences are the iPad's larger screen and the iPad's aluminum casing.

The cost of the Xoom is clearly pretty high. It's got every leading edge component one could put in a device of its size. It's BOM and manufacturing costs probably significantly excede Apple's $275 with Xoom's 32GB, two higher quality cameras and 4G-capable radio.

And then there's the iPad 2. Rumors indicate few major hardware spec changes. One or two video-chat-capable cameras and a refresh of the SOC CPU look to be the only additions. But most importantly the iPad 2 probably represents a cost reduction for Apple. Look for a lower cost case and other 2nd generation efficiencies bringing the current iPad's $275 cost way down.

Word is that Apple has sewn up contracts for 60% of the world's 10" touchscreen capacity for 2011.

Even with their lock on production, I expect Apple to bring the entry retail price for the iPad 2 down significantly in an attempt to hold onto market share while competitors are still in chaos. That window is a critical opportunity for Apple that will never happen again.

Lastly consider that Samsung, Motorola and the other new tablet vendors may not consider the iPad as their primary competition. They consider each other the competition. They know that iPad is a juggernaut at this point. But if they can execute and emerge dominant in the Android tablet market they are in a position to do well as macro-level opportunities develop for Android tablets as a whole.
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gRagib

How did Apple become the low price tablet company among major manufacturers? The competition offers more.

1. iPad2 cameras are 0.7MP (rear) and 0.3MP (front). Xoom cameras are 5MP (rear) and 2MP (front). (iPad has no camera.)
2. WiFi-only iPad does not have GPS chip; Xoom has (Droid does!).
3. iPad screen is ~130dpi. Xoom screen is ~160dpi.
4. iPad2 has (probably) 512MB RAM (1GB if we are lucky). Xoom has 1GB RAM. (iPad has 256MB RAM.)
5. Xoom has barometer. I really don't know what the rational for this is. I'd understand if it also had an environmental thermometer, not just for critical components like SoC and battery.
6. Xoom has a µSD card slot, although you'll need a software update to use it (promised to be released soon).
7. Xoom has USB and HDMI ports. For iPad/iPad2 you need to buy the $29 camera connection kit and $39 HDMI dock connector.

As I see it, the 32GB WiFi Xoom ($599) has better/more parts than the 32GB WiFi iPad/iPad2 (also $599).

Add $29 and $39 to iPad/iPad2 price if you need USB and HDMI (See #7 above).

Add $99/129 for Bad-Elf GPS if you want GPS on your WiFi iPad/iPad2, or get the iPad/iPad2 3G+WiFi to begin with ($729). All Xooms have dedicated GPS chip in them, even the WiFi-only ones (See #2 above).

And if you want 3G, the 3G Xoom ($799) gets a free upgrade to 4G in a few weeks/months.

If you add up the costs for the iPad/iPad2, it is very comparable to the Xoom. The difference is may be a few dollars here and there. Those accessories take up space and you can lose them. I'd spend the few extra bucks and get the Xoom because it is easy to lose the accessories; I've lost a pair of the iPad CCK and had to buy another one.

You decide for yourself.

Peace.
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Bix

Yeah, but...that's still not the norm for Apple. They're still at the lowest entry point of the major tablets (the Viewsonic G has fallen under the radar because while it has great hardware, it needs to be rooted to work well) and the other major manufacturers are completely nuts in how they're not getting WiFi only units out sooner.
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