Contrary to popular belief, Apple’s pricing is in no higher than the competition for most products. If you compare Mac computers with identical specifications (same processor, front side bus, memory type, drive speed, and spec Windows Ultimate since it’s the closest to OS X) you’ll find that Dell and HP computers are equivalent to Mac computers in price.
Take the MP3 player market. It isn’t called the IPod market because Apple overcharges for a product that under performs. If we take out batter issues it’s a popular product for a reason, lots of room for lots of music. And then we get to the Tablet Computer market, a market invented by Microsoft, and now pretty well owned by Apple. For the last year none of Apple’s competitors have been competing. Instead they’ve produced one over priced piece of kit after another, while Apple has merrily sold every IPad Foxcon could build.
Apple is quite capable of using low pricing in an attempt to prevent competition from entering the market, and that’s what they did with the IPad. Virtually every analyst expected Apple to sell the entry level IPad for $1000.00, instead Apple sold it for $500.00. From Apple’s earnings call as reported by Business Insider:
5:12 Looking ahead to June quarter, expect revs between $13b-13.4b, vs. $9.7b last year. Expecting margins to decrease. Expect about 25% of GM decline to be driven by iPad sales. Very aggressive with pricing and delivering tremendous value, want to capitalize on first mover advantage. The other factors: Stronger US dollar, Mac portable transition, education buying season beginning, and a future product transition. (Oooooooh.)
So what does a competitor do when Apple doesn’t follow the playbook? Pray like crazy. It was about all they could do, since Apple had managed to keep enough of the details under wraps until the release date, and no one else had a working operating system ready.
Finally however there’s a couple of competitors for the IPad that can compete on features, and price. Apple’s year long happy time may be about to end.
First up is the Acer Iconia Tab A500 running the Honeycomb version of Google’s Android OS. it will be carrying the Nvidia Tegra 2 at 1Ghz. Yes, this one will have an OS that is optimized for tablets, as compared to the earlier competing Android tablets which had the smartphone version. Yes, it’s cheaper than them, and cheaper than the IPad 2. It also has a marginally larger screen, but weighs more. Will it sell? Let’s wait six months and see. Still it looks like a relatively competent attempt to beat the IPad 2 at it’s own game.
Second up is the Shenzhen GS30, a Chinese designed and built IPad 1 clone. It claims to use the same processor, screen, battery, and a bunch of other components as the original IPad, which is good. That translates to the Samsung S5PC11o running at 1Ghz. It will be running Google’s Android operating system, but here’s where we hit a problem. We don’t know which Android. The reported price is 2000 Yuan ($306.00 US) to OEMs. Volume pricing would be lower, so we might see them on the North American market for as little as $400.00 in the shops, or on Amazon. We hope these guys did their cold weather testing unlike the first Iphone clones that died in northern China.
Third is the Rim Playbook, which is in the shops. There’s a curious rumor about it which needs to be checked before we report on it though, stay tuned. S|A