Best buy has released a statement saying that as of Oct.1, the price of the HTC Flyer (read our review) will drop from $499 to $299. This is hot on the heels of a similar announcement about the BlackBerry Playbook, which also saw a $200 price drop to $299. After seeing products sit on the shelves, and fire sales, and cheap competitors, it looks like retailers (and likely OEM's -- Best Buy isn't eating the entire loss I'm sure) have realized that there are a lot of people who want a tablet device, but don't want to spend $500-$800 on a Galaxy Tab 10.1 or an iPad.
It's called "margin compression" and "commoditization of the space", and just as it destroyed everyone making high-margin PCs it's now going to do the same thing to tablet makers.
Oh sure, there will be those who claim to have the "panache" to avoid it (Apple primarily) for a while, but they'll fail. This is exactly what I expected to happen as a consequence of HP's actions: They permanently changed consumer acceptance of prices that were always idiotic for tablet computers.
Let's face it folks -- you can buy a real portable PC (called a "laptop" for those who are unaware) for well under $1,000. For a kilobuck you can buy a really nice laptop with an IPS screen, 500gb of local storage and a dual-core processor that kicks the crap out of anything in a tablet. It has a real keyboard, it has audio and video and it has expansion connections such as USB ports.
The tablet is a third of the machine, when you get down to it. I expect the "full-featured" price for nice tablets on a value-comparable basis, is somewhere right around $300.
The problem is that it's nearly impossible at present to profitably make them at this price, and thus those firms enjoying high margins on them now (cough-apple-cough) are going to get trashed.