The iPad will continue to dominate the tablet space for many reasons, noted Peter King, analyst at Strategy Analytics in an interview with Wireless and Mobile News.
Tablet buyers are not just buying a tablet but want an entire ecosystem of content, apps and functionality. There will be many hurdles to jump, before the price drops down to $199 for full-powered tablets.
In the case of the HP TouchPad, King said “You could buy a Ferrari at a Ford price,” which accounted for the fast sales when the prices of HP TouchPads were lowered to $99(16GB) and $149(32GB).
Prior to the sale, Best Buy tried to return over 200 thousand of TouchPad tablets because they were not selling. King could not predict if more cheap TouchPads would come to market but estimated that about one million TouchPads were made.
The Kindle Fire is does not compete directly with iPad on the power side, but does has some of the good features of the iPad such as a content delivery system of books, apps, movies and its own ecosystem. More importantly, “The Kindle Fire acts as a check-out station, for Amazon purchases,” said King.
The pricing of the Kindle Fire for $199 was set to compete with the $249 Nook Color. Strategy Analytics predicts Amazon will sell more than 15 million of its new Kindle Fire tablet worldwide by the end of 2013.
There are cheap Android tablets available that cost less than $100, but buyers return them to the store because they are “rubbish” and lack ecosystem support, says King.
Strategy Analytics, recently reported that the Apple iPad captured 80 percent share of tablet shipments in North America during the second quarter of 2011.
The closest competitor to the iPad are the new tablets make by Sony (Sony Tablet S), because Sony has the infrastructure, consumer electronics, technology, content and retail sales channels to make it work, noted King. However, Sony has not been able to top Apple with its other products.
Prices will eventually come down for tablets. King predicts that a $199 ecosystem-supported tablet will be at least two years away.
Instead of consumers begging HP to let them buy a TouchPad for $99, maybe they should be begging Apple to lower the prices of iPads. Apple controls the prices of the tablets through its relationship with suppliers and keeps a high profit margin reported King.
When another tablet comes to market with all the features and ecosystem of the iPad, it may convince Apple to lower iPad prices, King concluded. Until then, Apple will maintain its upper hand and iPad grip on the North American tablet market.
Author’s Note:
It is was my hope to give hope to the bargain conscious tablet-buyer. For now, it looks like the super-cheap HP TouchPad was the best tablet sale ever. The Kindle Fire comes close but lacks Bluetooth and other features (see comparison chart) while it wills make a great holiday gift. HP may not be selling its next round of HP TouchPads at such rock bottom prices because it has raised prices on its website.
iHS iSuppli noted that with its lower pricing than the iPad, and its positioning as a super eReader, the Kindle Fire may serve to expand the tablet market.