With a base price of $499, the recently announced iPad isn’t exactly cheap. Most netbooks, smartphones, and other mobile computing devices available today can be picked up for significantly less. But for an Apple product, $499 ain’t bad. COO TIM Cook had previously indicated that he didn’t think the company could produce anything worthwhile in the netbook space (and he’s not a fan of traditional netbooks) for less than that price. So most pundits kind of expected the Apple Tablet to run $800 or more. As it turns out, the most expensive version of the iPad will run $829, and that’s for a model with 3G connectivity and 64GB of storage.

Anyway, long story short, that’s bad news for some of the companies that were hoping to put out their own tablets and market them as cheaper alternatives to the Apple Tablet. DigiTimes reports that Asus, MSI, and other would-be tablet makers were hoping to sell their products for 20% to 30% less than Apple’s. But that would have been a lot easier if the iPad cost $1000.

That doesn’t mean we won’t see some of the promised iPad competitors hit the streets later this year. But the profit margins are likely to be slimmer and we could see companies cutting some corners to keep costs down.

Of course, there have also been plenty of chip-makers promising that $200 tablets could hit the streets at some point. But I haven’t seen a manufacturer actually follow through on that promise yet, and my guess is that we’ll have to rely on telecom subsidies to bring tablet prices down to that point.

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24 replies on “Apple iPad’s $499 price tag has other tablet makers rethinking pricing”

  1. I just returned from China and Taiwan. I put my eyes on several ipad tablet clones that are in prototype stage. ODMs were waiting for the Apple announcement to complete the designs. I saw 7″, 8.9″ and 10.1″ screen versions. The display size makes a big difference in price. For instance, moving from the 10.1 to the 8.9″ screen will reduce retail price by almost $50. (all screens are capacitive multi touch). All were running Android and all have Flash 10.

  2. I have to agree that Apple set the bar to competitors fairly low –
    Toss in a few more types of attachment points (USB, Zigbee, what_have_you)
    and you have a “feature enriched iPad” for under $10 manufacturing cost.

    Andriod? Touch Screen? ARM-anything?

    Still have the MIPS Andriod reference release sitting on my server, waiting for
    its chance to jump on board the ASUS O!Play (or O!Play Air).

    Although media couch potatoes might complain about having to walk across
    the room to tweak the TV screen. They will complain less when they check
    out the price of a 56 inch touchscreen. (hint: over $200, well over)

    As of last week, the owners of ARM based boxes have joined our community
    of owners of MIPS based boxes.

    Although Brad hasn’t had time to report on the little Media Player boxes since
    he covered a few last October here;
    We have a photo tour of the O!Play and O!Play Air guts posted now:

  3. I’ve filmed 7″ $100 Tablet platforms at CES 2010: https://armdevices.net/2010/01/16/109-tablet-by-https://armdevices.net/2010/01/14/apusone-arm-prhttps://armdevices.net/2010/01/14/sgw-7-android-https://armdevices.net/2010/01/14/hott-m700-is-ahttps://armdevices.net/2010/01/09/marvell-armada…A bunch based on Freescale and Nvidia Tegra2 can for sure be sold below $200. The 8.9″ or 10.1″ screen size costs not more than $20 or so more than a 7″ screen. There is plenty of margin to be much cheaper than Apple and simply ship with Android to provide kind of the same experience.

    1. Problem with ARM-devices like Smartbooks: they only exist on CES and Computex.
      Where is the Freescale ARM-Netbook from CES 2009? Or the Smartbook from Qualcomm? Or try to buy the cheap Archos 5 IT with 8GB…

      1. The cheap smartbooks are coming to the market. You can find the $249 Archos 5 IT with 8GB at Radio Shack, the smartbooks were waiting for the optimized software to be available. With Android and Chrome OS for ARM, the perfect software for them is now becoming available which means they will be released very soon.

        1. >> the smartbooks were waiting for the optimized software to be available

          OK, but why Freescale/Qualcomm say that here Smartbooks come summer/fall 2009?

          And a ARM-Manager talks about a “bis rush” with ARM-Netbooks summer 2009.

          They don’t now about a non-exist “optimized software” ? Whats going on?

          1. >> The key is to provide fast enough web browsing experience before the mass market will want them.

            OK, and Freescale/Qualcomm find this out after the advertisement? They need 1 more Year for this?

            (sorry for my bad english)

        2. I don’t understand this argument. Linux has been running on netbooks for A While, and there are even distros optimized for netbooks, and they are getting better all the time. How is the software not ready? How is Chrome going to make these machines much more viable than they are with Linux?

          1. Support could be a big factor.

            As big as Ubuntu and other Linux Distros might be, support is still solely left up to forums and community members.

            Android/Chrome OS will come with the support of a giant company that will commit to solving consumer issues. When people (the common consumer) buy a computer, they expect to be able to call up the company they bought it from and demand them to help fix the issue.

            This is not possible with Linux and it may not even be possible with Google OS’s, but it’s something that Windows and OSX has always had over Linux.

          2. That statement is dead wrong –
            All major distributions (except Debian) provide contract support –
            All you have to do is send them money.

  4. Apple can go with a lower hardware margin on this because they take 30% of all App sales. Whereas netbook makers have no additional revenue streams once the hardware is sold…

  5. why don’t they stop trying to be cheaper and just build a quality product at a fair price,,,

  6. Will anyone buy JUST the cheap pad? Doubtful. Add in the dock and a case (gotta protect that screen) and the pad reaches a more typically Apple priced. And I think it is amusing that Apple is even producing a keyboard accessory; seems like an admission that you won’t like typing on the pad for any length of time.

    1. Umm yeah, it’s obvious that people are going to want a keyboard to do things like content creationg with… What gets me is that they did it with a dock. The thing supports bluetooth, just pair a wireless keyboard with it, then people can orientate it any way they want.

      For everyone that’s going on and on about how netbooks are better… They kind of are, they kind of aren’t. Give it about 5 years. There are plenty of people who still think Netbooks are BS tweener devices that shouldn’t exist, and when you talk about them they immediatly start talking about the better 15.6″ laptop you could get for a better price…

      Think about what this device allows for, and how it would impact what you do with it. It’s not really competing with netbooks, assuming that you do more than passively consume media on your netbook, in which case this might actually be better. But in a few years, when the rest of the industry has weighed in and we all have access to quality $200-300 tablets, it’s going to be a different computing world. It really is. Is this device perfect? No. But my hat is off to them. Apple has actually made me THINK about what I would use a device like the iPad for, and the more I think about it, the more I find the idea compelling.

      I’ll probably buy a android tablet with a pixelQi like screen, running a Tegra 2 (or whatever the current version is) SOC, when the second or third generation comes out and they’ve worked out the kinks, and the price war has really kicked in.

      To people who want Windows on a tablet… Why? What does windows bring to the table? Once these things hit critical mass you won’t miss the app support they’ll have everything you could ask for running in a native ecosystem. You definitely won’t miss the massive overhead of an operating system that requires 14gb of storage, and isn’t optimized at all for the tablet use model.

      I’m thinking that Tablets really aren’t ‘computers’, they’re pretty much the ultimate MID… And with an always on wireless connection, Google Voice to do VoIP with, I could see ditching my cell phone for one. Especially once they start getting the bluetooth headset pairing down, and someone puts a camera on one for voice chats.

      I guess my point is don’t go with the knee jerk reaction. Think about the use model, and what changes it would allow you to make in how you interface with technology, and then see if a netbook really would be better. And don’t focus on the Apple iPad, think about tablets in general, because my friends the iPad is just the first of many products that will be hitting the shelves soon, and isn’t even the most compelling one that I’ve seen.

      And if you don’t agree with me about what YOU need, think about what you’d rather give your Mom (or Grandma if your Mom’s pretty technically savvy): A easy to use touch tablet, or a netbook with Windows. Think it over.

  7. On the bright side Apple set the bar very low for everyone.

    -Intel Atom 330 (Dual Core)
    -Nvidia Ion
    – 9″-10″ capacitive touchscreen, Pixel Qi b/w mode
    – 2GB RAM
    – 16GB/32GB SSD
    – (x2) USB ports, 1 SD card slot, dual mic-phone jack
    – 1.3 camera, (x2) speakers, (x1) microphone
    – wi-fi, 3G (or both)
    – Windows 7 Home Premium, on a decent Linux vers.
    – 4 Cell Battery

    The key would be just three or four good touch screen programs packed in. The most important touch-app being the browser. With the two USB ports you have the ability to add keyboard and still have another USB device plugged in as well.

    If I were Acer or MSi I would take what they know from the netbooks and make a ultra-thin clam-shell with a flip touchscreen. Its got a keyboard when you need it, its got a good touch screen when you don’t. And I think that could be done for $499 with just wi-fi and yet still sport a 32GB SSD.

    1. Not to nitpick or be rude, but some things on your list are ridiculous =P. Atom 330 + Ion + 4 Cell Battery = 1 Hour of battery life. The dual core Atom is a travesty when it comes to power consumption. Pinetrail with a more fleshed out Broadcom would be the best solution IMO. Or sacrifice Windows for a Snapdragon/Tegra 2.

      16GB SSD + Win7 Non-Starter = Approx 4gb of free space…so that’s one or two apps before your SSD goes to hell.

      But I agree that the bar is low and I want to see more convertibles. Viliv s10, Asus t101mt, and Acer 1820p are all on tap.

      1. Yes, but the big complaint with iPad is it wasn’t running a ‘computer’ OS. Going with ARM and Terra defeats everything that needs to be avoided unless you want fall into the same trap.

        So okay lets economize. Go with Pine Trail, go wth Broadcom for HD video, go with Win 7 because YOU HAVE TO (but add an instant on OS too, and increase the RAM. But, sorry, you have to stay with 32GB SSD to keep costs down at least with a base model and as I said above you need Win 7. An the bright side with a SD card slot you have room for content on that while SSD cost go down. Also, if you have the Pixel Qi screen you can at least boast about the “book mode” power use. Chipping away at the power draw helps with what we see above, but also the power draw of iPad seem to be unraveling as Apple admits what people will get out of their battery will vary form what they presented Wednesday.

        1. Whose complaint? My big complaint about the iPad is that it can’t run programs that aren’t approved by Apple and sold through Apple’s store. I don’t care what OS it runs — except that I’d like to avoid Windows, which I detest. Some form of Linux or Chrome OS would be fine with me.

  8. Hope they name the price in the UK soon though, because the only way the exchange rate is going is up 🙁

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