The alleged iPad killing tablets are coming, but with price tags that aren’t going to even come close to denting Apple’s lead. When Apple CEO Steve Jobs launched the iPad it wasn’t clear how aggressively these newfangled devices were priced. Now we know because Android tablets and other rival tablets can’t hang on pricing.
In recent days, tablet pricing details have emerged. To wit:
- Samsung’s 7-inch Galaxy Tab will run you $499 for a Wi-Fi version (top right). That price matches Apple’s iPad pricing and Samsung is packing in some key hardware features. But Samsung (SSNLF.PK) isn’t likely to move the needle on thwarting Apple (AAPL).
- ViewSonic announced its ViewPad Android devices (bottom right). The ViewPad 7-inch version will run you $479. The 10-inch version will run you $629. Both versions are Wi-Fi with no 3G.
- The HP Slate 500 has Windows 7 and will cost you $799. Even though the HP (HPQ) Slate is geared for business use, there were plenty of chief information officers with iPads at the Gartner powwow last month.
- Will Research in Motion’s (RIMM) pricing on the PlayBook even be in the ballpark? We don’t know yet, but it’s unlikely.
These prices illustrate how aggressive Jobs was at the iPad launch. Apple had the device and the pricing to arguably grab at least an 18-month lead.
So what happened?
- Apple built its own chips to take on an industry that clearly wasn’t ready for the iPad’s launch. It will take the Android ecosystem another rev on the product cycle just to approach what Apple has today.
- The players taking on Apple all have some sort of restriction. Apple has its own components, software and design specs. Apple also doesn’t give a hoot where it gets its parts. Now contrast that with rivals. Samsung as a massive tech conglomerate has a few built in advantages, but it’s Korea’s champion. The company is not going to go to China for parts.
- The software ecosystem isn’t ready. Microsoft (MSFT) is cramming Windows 7 into a tablet. HP has the webOS waiting in the wings. Android (GOOG) isn’t quite tablet-ready yet. Apple had the ecosystem and operating system. Apple just had to add a 10-inch screen.
A few weeks ago, it appeared that Jobs was just ranting about Android on the company’s earnings conference call. But one thing he had right in that well-documented rant was the pricing model as iPad moat.
“Our potential competitors are having a tough time coming close to iPad’s pricing even with their far smaller, far less each pensive screens. The iPad incorporates everything we’ve learned about building high value products from iPhones, iPods and Macs. We create our own A4 chip, our own software, our own battery chemistry, our own enclosure, our own everything, and this results in an incredible product at a great price. The proof of this will be in the pricing of our competitors’ products which will likely offer less for more.”
Indeed, that less for more strategy is exactly what Apple’s rivals are pursuing. Perhaps, the iPad killers will emerge, but no one seems to be able to go toe-to-toe. As a result, you’ll have downmarket devices—Cherrypal’s CherryPad and Barnes & Noble’s (BKS) Nook Color quasi-tablet—and premium plays that can’t threaten Apple’s pricing.
Add it up and the iPad will enjoy at least another 6 months of market domination—most likely more.