Friday, April 13, 2012

The Tablet Wars and the US$250 Samsung's Galaxy Tab 2 7.0 P3100

There have been plenty of rumors that a US$199 to US$249 Google Nexus Tablet is in the works. In this blog we have speculated that Asus will manufacture that tablet based on its own Asus MeMo 370t which it displayed in January 2012 to be priced at US$249, which has now gone missing in action. 

Tablet pricing. Cheap Android tablets have been around since the second half of 2010, but not from major manufacturers. With Amazon Kindle Fire released late last year being priced at US$199 and the cheapest Apple iPad 2 having its priced reduced to US$399 in March of 2012, Google Android tablet manufacturers are really under pressure to compete price wise. Part of the success of the iPad is very good pricing. 
iPhone 4S (16GB) - BOM: US$170  ---  Retail Price: US$649 
iPad 2 (16GB WiFi) - BOM: US$320  ---  Retail Price US$499
People expect to pay a bit more for an Apple product, so an Android product which is priced equally seems expensive. With a bot over 60% of the tablet market share, more developers make apps for the iPad than Android tablets.
For Apple's iPhone, Apple relies on carrier subsidies to makes its iPhone affordable. You saw this when both Globe Telecom and Smart Communications launched the iPhone 4S in the Philippines. Effectively, the iPhone 4S became as much as 50% cheaper to acquire on a plan as against the iPhone 4 which had Globe as the exclusive distributor.

For the iPad, Apple simply sells it with much smaller margins, and that is why it is harder for Android manufacturers to build tablets which have lower prices than the iPad. In sum, it seems like Apple's strategy  is to position their iPhone's, Macbook's and iMac's as premium priced products, with the iPad, iPod and Apple TV being targeted at the mass market.

Android manufacturers response. With the very though pricing situation some Android smartphone manufacturers have simply gotten out of or are taking a pause in the tablet game, like HTC. Asus, a notebook manufacturer, has a nice niche market in the tablet space with its Transformer series which combines the features of a tablet and a notebook. Samsung, well it looks like they are determine to compete in this though arena.

Samsung Galaxy Tab 2 7.0. While we were expecting a low priced 7-inch tablet from Google in the next month or two, Samsung is the first to hit that market with its US$250 Samsung Galaxy Tab 2 7.0 P3100. 

Quick specs:
  • Android 4.0
  • 7-inch, 1024 x 600 pixels
  • 8 GB of storage, expandable via MicroSD cars
  • 1 GB of RAM
  • Dual core 1 GHz processor
  • Power VR SGX 540 graphics processing unit
  • 3.2 MP autofocus primary camera
  • VGA secondary camera
  • WiFi only*
  • 4000 mAh battery
*GSM/3G version also available as the P3110

While priced US$51 more than the Kindle Fire it does have expandable storage and camera's. Also Amazon Kindle Fire does not access the Google apps store but Amazon's own Android apps store which only supports a few countries. Those looking for an international version of the Kindle Fire, well here it is. 

At US$250, this places it US$149 less than the iPad 2. The two do not compete directly because of size, but I think people would find that both the US$399 price for a 9.7 inch tablet with 16 GB storage and the US$250 price for a 7-inch tablet with 8 GB of storage as being "equivalents". Neither one is really a better deal than the other, so you will pick based on the size you want.

As US$250 price should translate to a Php12,500 to Php14,000 price in the Philippine market when it is finally released here.  

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