Android tablets undercutting iPad prices

Entry-level Android tablets are bidding for buyers with prices lower than Apple's iPad

In an effort to attract buyers away from Apple's iPad, device makers are setting starting prices of Android tablets to undercut iPad's US$499 entry-level price.

The starting prices for tablets with 10.1-inch screens from ViewSonic, Asustek and Acer range from $279 to $449. The tablets run different versions of Google's Android OS, include 10.1-inch displays, run on dual-core ARM processors and are Flash-capable.

Apple first shipped the iPad in April last year, and set the tone for the market with its aggressive starting price. The first Android tablets such as the Samsung Galaxy Tab that starting shipping later in the year were overpriced, and the low pricing of new tablets could be a market correction, said Roger Kay, president of Endpoint Technologies Associates.

A ViewSonic GTablet, originally priced at $499, is now available on Amazon.com for $279.99. Acer's Iconia A500 Tab is priced starting at $449 and will ship later this month. The starting price for Asus' upcoming Eee Pad Transformer was listed at $399.99 on Best Buy's website, but the page has now been removed.

According to an IDC survey, 10.1 million media tablets shipped during the fourth quarter of 2010, of which Apple's iPad had a 73 percent market share. In second place was Samsung's Galaxy Tab, with 17 percent market share, while "regional players" captured the rest of the market.

Apple dominates the tablet market because of iPad's aggressive pricing, design and features, Kay said. By comparison, high prices and lack of a cohesive software stack have made Android tablets relatively less attractive to buyers.

"The Android system lacks the total ecosystem and unification that Apple has," Kay said.

Samsung's Galaxy Tab, which comes with a 7-inch screen, originally went on sale late last year through Verizon starting at $600 without a contract and was considered overpriced. Earlier this month, Verizon cut the starting price of Galaxy Tab to $500.

But not all Android tablet vendors have changed their pricing strategy. Motorola continues to offer its Xoom tablet from $599. Buyers can acquire Android tablets from wireless carriers for low prices, but typically have to sign a two-year mobile service agreement.

Buyers typically have a short attention span and could reconsider feature-rich Android tablets at lower prices, Kay said. But it remains to be seen if Android tablets will shake the iPad's market dominance.

Apple in March started shipping the iPad 2. There is currently a two- to three-week waiting period for iPad 2 online orders.

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Agam Shah

IDG News Service
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