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Samsung Galaxy Tab doesn't need to beat iPad sales
- — 09 November, 2010 04:36
Samsung said it will likely sell one million Galaxy Tabs by the end of the year, but what do theoretical sales really mean, especially when Apple has already sold seven million iPads this year? For Samsung, one million units would mean a tidy profit and the establishment of the company as a solid competitor in the tablet and wireless market.
Samsung's announcement means that it would sell a million units between Nov. 10, when the Galaxy Tab goes on sale for $400 with a two-year contract with T-Mobile, and Dec. 31.
Verizon will sell the tablet computer starting Nov. 11 for $200 more, followed by Sprint on Nov. 14. That gives the Galaxy Tab about 50 days, selling around 143,000 a week, to hit the million mark. That's ambitious, but it's still at a slower rate than Apple's first million iPad sales.
While the Galaxy Tab may or may not win the title of "iPad killer," the 7-inch computer gets attention as the first serious rival for Apple's signature tablet. Both machines have their advantages and disadvantages, but the Galaxy Tab is mostly criticized for its Android 2.2 operating system, which is best-suited for smartphones rather than tablet computers. Along with an overtaxed OS, most Android applications designed for smartphones may not run as well on a 7-inch screen.
The Galaxy Tab is a decent machine, but it lacks the capability to eclipse the iPad. Nor does it motivate some like me, a non-tablet user, to buy one. At best, the Tab is equal to an iPad, and at worst, it's a disappointing Android tablet.
However, the Tab is also one of the latest 7-inch tablets creating a niche between smartphone and laptop. While there's no proof that business consumers want tiny tablets, especially when its main competition has a display almost three inches larger, tablets are still getting smaller. Small size is one of the reasons why the Galaxy Tab will make money, because cost for materials is only $205.
That's almost a 50 to 66 per cent profit when sold by T-Mobile, Sprint, or Verizon. (That's similar to the $499-and-up iPad's profit margin because materials cost $265.)There's no doubt Samsung is going to make money selling Galaxy Tabs, although Samsung's main wireless business is phones -- with 71 million units shipped in the third quarter, it's the No. 2 phone manufacturer in the world, two notches ahead of Apple.
However, if the Galaxy Tab sells well, it shows the world there's a demand for Android tablets. Selling one million would mean Samsung will pave the way for better and more efficient models. And they will be better, because this time they will run Android 3.0, an OS built specifically with tablets in mind. In many ways, the Galaxy Tab will be a true bellwether for the Android tablet market.
Samsung would like the Galaxy Tab to be a success, but the company is covered either way. Samsung knew it would have to put out a tablet to compete with the iPad to stay relevant. But I have a feeling that Samsung and many of the others are not counting on placing their products in Target and Walmart. They're just trying to get their product and brand noticed while they work on a serious contender for the top of the tablet computer heap.
In the meantime, a tidy profit on a million Galaxy Tabs may be all that Samsung could wish for, alongside its strong smartphone sales. It's probably already at work developing its next tablet that will overshadow the iPad.
Reach or follow Barbara E. Hernandez on Twitter: @bhern.