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iPad 2 Forces Samsung To Reevaluate Galaxy Tab

Soulskill posted more than 3 years ago | from the competition-is-easy-except-for-the-competition-part dept.

Android 520

An anonymous reader writes "Apple's iPad competitors are still spec-obsessed, and Apple's next-gen iPad coupled with the same price point is forcing Samsung to rethink its tablet strategy and pricing methodology altogether. The South Korean Yonhap News Agency relays a quote from Lee Don-joo, executive VP of Samsung's mobile division, about Samsung's upcoming Galaxy Tab 10.1 compared to the new iPad. 'We will have to improve the parts that are inadequate,' Don-joo said. 'Apple made it very thin.' Features aside, Samsung also finds itself in a bind price-wise. The upcoming Galaxy Tab model, complete with a 10.1-inch screen and Android 3.0, was initially going to be priced higher than the current 7-inch Galaxy Tab. Apple's iPad 2, however, is forcing Samsung to 'think that over.'"

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Excellent! (5, Insightful)

Twigmon (1095941) | more than 3 years ago | (#35413736)

This is awesome news. Competition is good for us!

Anyone know... (4, Interesting)

rsilvergun (571051) | more than 3 years ago | (#35413738)

how is Apple making the iPad so cheap? Nobody tries to go head to head with Apple. It's a waste of time. They're just too hip. So you fight on price or you fight on features. If the other tablet makers are neck & neck with Apple on price there must be a reason....

Re:Anyone know... (1, Interesting)

Twigmon (1095941) | more than 3 years ago | (#35413762)

Yeah this is really interesting. Especially because Apple are known for overpricing things. Does anyone else sort of get the feeling that they are losing money on the sales and making it back in app store? If they were doing that - it's a completely different to their usual strategy.

Re:Anyone know... (0)

Nerdfest (867930) | more than 3 years ago | (#35413796)

I saw an ad For OSX Lion that mentioned the iPad. I think they're planning on heavily typing the 2 together to get the average Joe (who can afford it) to get an Apple desktop as well.

Re:Anyone know... (4, Informative)

RzUpAnmsCwrds (262647) | more than 3 years ago | (#35413800)

Does anyone else sort of get the feeling that they are losing money on the sales and making it back in app store?

No one who knows anything about electronics manufacturing thinks this. The $499 16GB iPad, by all estimations, costs under $250 to manufacture.

Manufacturers love tablets because they are cheaper to manufacture than netbooks (smartphone-type SOC CPU, smaller battery, etc.) yet they sell for more.

This works because tablets are differentiated products, not commodities. Android is going to change that by doing the same thing it did in the smartphone market. Expect to see 10" Android tablets for $300 or less by the end of the year.

Re:Anyone know... (4, Insightful)

jo_ham (604554) | more than 3 years ago | (#35413894)

Expect to see 10" Android tablets for $300 or less by the end of the year.

I hate to bring it up, but that's what everyone said *last year* when the iPad 1 launched (at several hundred dollars under the estimates that people were quoting), and that "cheaper, better" Android tablets would waltz in and crush the iPad. Any day now, just you wait... etc etc for 9 months.

As yet, it has still not happened for tablets of the same spec as the iPad - the Xoom is as close as anyone has come and it is still more/about the same give or take.

Re:Anyone know... (4, Interesting)

markdavis (642305) | more than 3 years ago | (#35414304)

>"I hate to bring it up, but that's what everyone said *last year* when the iPad 1 launched"

Not that *I* remember, and I follow this stuff pretty closely. People did NOT expect any good iPad competition until AFTER Google optimized Android for tablet use, which is what 3.0 (Honeycomb) is all about.

As an aside, Apple went through the same thing with necessary changes to iOS for tablet use.

Now that 3.0 is released, Android tablets will, indeed, take off. Samsung ridiculously overpriced their pre 3.0 tablets, just because they could get away with it. That will certainly end this year. Even the $600 price tag on the Xoom will probably fall significantly within this launch year. (People have spotted reliable intel that it will even be at Sam' s Club for $539 when first released, placing it below the iPad price). Even so, I am not sure if reasonable (powerful, complete) 10" 3.0 tablets will hit the $300 price point this year, though. $500? Certainly. $450? Probably. Anything else might be pushing it. The point is they will be priced lower than the respective iPad model (they HAVE to if they want to compete).

Competition is a great thing... Samsung is just greedy and will (thankfully) have to stand aside if they can't play the game :)

Re:Anyone know... (1)

RzUpAnmsCwrds (262647) | more than 3 years ago | (#35414430)

hate to bring it up, but that's what everyone said *last year* when the iPad 1 launched (at several hundred dollars under the estimates that people were quoting), and that "cheaper, better" Android tablets would waltz in and crush the iPad.

That's not what I or anyone who knew what they were talking about said. Until very recently Google was actively discouraging manufacturers from making Android tablets, so the only devices were those from second-tier manufacturers without support from Google. They're cheap, but of course they suck. The one possible exception was the Galaxy Tab 7.

Now that we have an actual supported Android version for tablets, the market is about to change. I've always said that someone will blink and cut the price.

It looks like Samsung just blinked. If Samsung decides to go low price, other manufacturers will have to follow. Anyone who thinks that the Xoom will succeed at $799 is crazy.

Re:Anyone know... (2)

jrumney (197329) | more than 3 years ago | (#35414562)

I hate to bring it up, but that's what everyone said *last year* when the iPad 1 launched

And they were pretty much spot on [time.com] .

Re:Anyone know... (1)

Troll-Under-D'Bridge (1782952) | more than 3 years ago | (#35414678)

As yet, it has still not happened for tablets of the same spec as the iPad - the Xoom is as close as anyone has come and it is still more/about the same give or take.

The same-spec'ked iPad clone is probably a tough act to clone. But does a tablet have to be as feature-"full" as the iPad? Is this the vaunted Steve Jobs distortion field?

Outside the US, there are already sub-$100 tablets with resistive touch screens. Some even come with unofficial "Android" operating systems (i.e. not blest by Google).

I see no reason why a company can't undercut the iPad by half and still make a slim profit. For a long time, a certain software company managed to earn billions by making crappy knock-offs of Apple's then flagship Macintosh systems. When can another company or companies do the same for a generic tablet XPerience?

Re:Anyone know... (1)

jmorris42 (1458) | more than 3 years ago | (#35414034)

> The $499 16GB iPad, by all estimations, costs under $250 to manufacture.

I'd be shocked to find Apple paying more than $175 for em off the docks in China and I'd put my money on $150. That is for the basic WiFi version.

Listen up folks, there ain't nothing in a tablet. Compare a typical low end netbook that retails for $300 to a typical tablet.

Tablet has a touchscreen, and motion sensor over a netbook. The OS is basically free if Android or the Apple Tax if a iPad. The whole point of ARM was lower part count, reduced board size and cheap so we will assume the electronics is less expensive in a tablet.

The netbook has a big ass battery to keep an expensive x86 processor, chipset and GPU going for a couple of hours. It also has a more complex case including a keyboard and pointer. And on top of all that there is the Windows Tax.

Tablet vendors have been gouging since the only real competitor was Apple and they are selling the shit out of the iPad at insane prices (meaning insanely great margins to drive the insanely high market cap) and are hoping to get a taste of those margins while there are only a couple of products that have hit the stores in any quantity. This story is a sign that market forces are likely to start working more normally. $250-$350 tablets by Xmas that have capacitive touchscreens, motion sensors and robust ARM chips is my prediction.

Re:Anyone know... (4, Insightful)

node 3 (115640) | more than 3 years ago | (#35414408)

> The $499 16GB iPad, by all estimations, costs under $250 to manufacture.

I'd be shocked to find Apple paying more than $175 for em off the docks in China and I'd put my money on $150. That is for the basic WiFi version.

Listen up folks, there ain't nothing in a tablet. Compare a typical low end netbook that retails for $300 to a typical tablet.

Tablet has a touchscreen, and motion sensor over a netbook.

The iPad has an IPS display, which you most certainly *don't* find on a typical $300 low end notebook. Also, it's much more/much different inside, not much less (unless you are talking simply mass and volume which is not relevant to the price of the parts and assembly). You have all sorts of additional sensors and IO. The iPad is also made of aluminum and glass, not plastic and plastic.

This story is a sign that market forces are likely to start working more normally. $250-$350 tablets by Xmas that have capacitive touchscreens, motion sensors and robust ARM chips is my prediction.

And if you really think they cost $175, fully packaged and ready to ship, then Apple will still be able to undercut these tablets. Tablets which are somehow magically going to cost 1/3 of what they cost now. Tablets which have sold extremely poorly and if they actually *could* undercut the iPad by half, they should have done so long ago.

No, we won't see proper tablets, Android or otherwise, for $250-$350 by the end of the year. There might be some laughable attempts, but nothing that really competes with an iPad or a compelling Android tablet.

Re:Anyone know... (1)

AvitarX (172628) | more than 3 years ago | (#35414612)

Apple has the advantage of a lot of vertical integration too.

Best Buy etc don't need their cut.

Re:Anyone know... (1)

jrumney (197329) | more than 3 years ago | (#35414654)

Also, it's much more/much different inside, not much less (unless you are talking simply mass and volume which is not relevant to the price of the parts and assembly).

Mass and volume is very relevant to parts cost, and its a large part of why ARM is cheaper than Intel for the same capabilities. And number of parts affects assembly cost, so that ARM SoC is going to come in much cheaper than the traditional PC design of Intel processor, Northbridge, Southbridge, Graphics controller..., or even the latest Atom SoCs which still have a separate Southbridge IO hub.

Re:Anyone know... (2)

theurge14 (820596) | more than 3 years ago | (#35414156)

The difference with Android tablets is that they're not going to be competing armed with simple apps like Angry Birds and DoodleJump. They're going to go head to head with things like GarageBand and Pages. So far I don't see anything for Android that's on that level of software at this time.

Re:Anyone know... (0)

markdavis (642305) | more than 3 years ago | (#35414378)

You haven't given it much time. Come back in a year and then complain :)

At launch, Android tablet devices will have access to the vast majority of what the ipads had access to last year. That is pretty impressive if you ask me.

And since Android has now surpassed Apple on smartphones, and it's use is still accelerating rapidly, there will be a HUGE market for Android tablets. People will Android phones are more likely to want Android tablets than iPads.

Re:Anyone know... (4, Interesting)

peragrin (659227) | more than 3 years ago | (#35414684)

if you have to wait a year for a third party to develop your useful apps then you have already lost.

if you have to wait 18 months and then hack a security update onto your system because it is being blocked by your carrier you have already lost.

Apple is developing good apps already paving the way for IOS developers. Google is letting other people do the heavy lifting and porting.

Re:Anyone know... (4, Insightful)

node 3 (115640) | more than 3 years ago | (#35414284)

No one who knows anything about electronics manufacturing thinks this. The $499 16GB iPad, by all estimations, costs under $250 to manufacture.

No one who knows anything about products thinks this. The tear-down component price estimations are deliberately lowballed, and it costs a lot more than just the sum of the components to take those components and combine them into boxed and shelved iPad, ready for purchase.

Android is going to change that by doing the same thing it did in the smartphone market. Expect to see 10" Android tablets for $300 or less by the end of the year.

Not going to happen, except possibly for some humorously bulky, crappy-screened, and overall completely inadequate caricatures of a proper tablet.

You Android folks were saying this was going to happen by Summer of 2010, then it was Fall 2010, then it became "sometime in 2011" (skipping over the Winter, which was clearly lost by the time Fall came around). If you think there will be iPad-quality Android tablets for under $300, you are going to be quite disappointed when 2012 rolls around. It's not even a sure thing that there will be proper Android tablets for the same price as an iPad by then, let alone $200 cheaper.

Re:Anyone know... (1)

jensen404 (717086) | more than 3 years ago | (#35414406)

The iPad has a higher quality screen than any netbook. (And any notebook under $3500)

Re:Anyone know... (1)

mrsnak (1818464) | more than 3 years ago | (#35414616)

The $499 16GB iPad, by all estimations, costs under $250 to manufacture.

You've obviously never been in retail. ;-) What an item sells for is never what it costs to make. Never has been.

Re:Anyone know... (1)

cbeaudry (706335) | more than 3 years ago | (#35414672)

Actually a $499 electronics product most likely costs less than $100 if not less then $50 to manufacture.

Electronics manufacturing is cheap. With high markup, especially in the market Apple plays.

I would be very very very surprised if the 16GB iPad cost anywhere near $250 to manufacture.

Re:Anyone know... (5, Insightful)

peragrin (659227) | more than 3 years ago | (#35413804)

but they aren't losing money on the parts.

Instead Apple is using it's massive cash reserves to buy 10 million of each part ahead of time knowing that they CAN sell them.

Samsung is only buying 2-3 million at a time. he who buys 5 times the parts you are is going to get a better price.

Re:Anyone know... (1)

Anonymous Coward | more than 3 years ago | (#35413938)

Hear, hear... Apple is in a privileged position in that suppliers to Apple can just about bank on a certain number of sales, -especially- with a 2nd gen of the same type of device.

Apple can negotiate lower part prices, lower fab costs, etc. I wouldn't be surprised if Apple could negotiate SoC solutions in order to keep size down and get a semi-exclusive license to the results.

Re:Anyone know... (2)

jamesh (87723) | more than 3 years ago | (#35414214)

That was my (uninformed) conclusion too. They know that unless they _really_ screw up somehow, they are going to sell these things as fast as they can make them, so they don't need to hedge their bets on manufacturing capacity and part volumes. They also have a pretty good idea of the lifetime of their previous products and that while some people will be willing to replace the battery etc, most are just going to chuck it in the bin and buy a new one once the battery starts losing capacity.

Re:Anyone know... (2)

Brikus (670587) | more than 3 years ago | (#35414376)

Actually Samsung is a horrible example. Samsung is the one of the companies selling components like flash chips, SoCs, and displays to tablet manufacturers like Apple. Since Samsung is one of the tablet makers than can source almost all their own parts in house, I don't see how the price of components is the reason they aren't winning in the tablet market.

Re:Anyone know... (2)

Anonymous Coward | more than 3 years ago | (#35414412)

Apple is buying many of these parts from Samsung. Samsung wins either way.

Re:Anyone know... (4, Insightful)

node 3 (115640) | more than 3 years ago | (#35414420)

Samsung is only buying 2-3 million at a time. he who buys 5 times the parts you are is going to get a better price.

The funny thing is, Samsung makes some of these parts. Flash memory and displays (although maybe not tablet-sized displays).

Re:Anyone know... (2)

saleenS281 (859657) | more than 3 years ago | (#35413810)

I get the impression with the amount they sell, they can demand lower prices from their suppliers. If they're willing to lock in an order for a set amount of product, I'm guessing their suppliers are more willing to play ball on pricing. Guaranteed income is a hell of a thing when you have to predict numbers for Wall Street.

Re:Anyone know... (4, Interesting)

Drakino (10965) | more than 3 years ago | (#35413870)

Apple's financials still show a majority of their profits come from the hardware. The App store is grouped in with the overall iTunes store, and remains a smidge over break even. That 30% Apple gets from paid apps helps to also pay for all the bandwidth free apps consume, along with the other free content in iTunes such as the podcasts they cache and help host.

Apple is able to make the iPad and other devices cheeper due to controlling the supply chain and manufacturing to a very deep level. They made a strategic investment in flash (storage) years ago to ensure they always had access to what they need. They did the same again recently for displays. Apple has also moved to making their own batteries, enclosures and other components to help strip out any unnecessary cost. The unibody design they use in so many products, including iPad helps reduce manufacturing labor quite a bit. Instead of having a worker sit there screwing together all the internals to make a frame, then slapping a case around it, they instead just screw in all the components directly to the unibody case the machine spits out.

Apple is one of the few companies out there that takes a lot of time to design everything down to the screws. A little bit of time spent paying a few designers to come up with a more efficient PCB layout and cabling assembly adds up when you make millions of a particular device.

Re:Anyone know... (4, Insightful)

painandgreed (692585) | more than 3 years ago | (#35413872)

Like it or not, Apple has good internal design skills. They threw the industry off when the iPhone came out and it was mostly battery and thus had a much longer time than competition thought they'd have and thus was much more of a threat than they gave it credit for before it came out. They know how to design the internals of their devices and can factor price into it I suspect. Also, they knew what they were working towards and could buy up parts when nobody else wanted them. There was an article not too long ago about Apple buying up all the touch screens. They did so when it was much more of a buyers market and they could set a low price. Probably the same with the other components. Afterwards and when everybody is trying to compete to make their own tablets, it's much more of a seller's market and prices are going to be higher even if Apple hadn't bought up most of the production already. Add in that the tablet was the original idea that the iPhone came out of. I suspect that just as OS X was being compiled on x86 the entire time but kept secret till they wanted to switch processors, that the iOS was already prepared and prepped for tablets the entire time the iPhone was coming out. Thus most of the work to make a tablet OS had already been done and was ready to move over to a tablet.

Re:Anyone know... (4, Insightful)

peragrin (659227) | more than 3 years ago | (#35413992)

That is why apple is secret. don't tell people you have a full port for intel, or sparc chips. just make sure it works, wo when you do switch no one will know when until it is too late.

the apple phone rumors started in what 2005? that means apple had 2-3 years more development time than everyone else on the market. The ipad 3 is already under design, it's spec's may have already been mostly set too. competitors are designing to the original ipad, and maybe the ipad2 if they are lucky.

It took the competition 3 years before they couldn't really start to challenge the iphone. First movers have the advantage you can shift target goals easier.

Re:Anyone know... (5, Interesting)

BearRanger (945122) | more than 3 years ago | (#35413884)

This idea of "Apple making it back in the app store" needs to be squashed. Apple's financial disclosures make it clear how much money they make on the App Store/ iTunes Store. The profits are just beyond break even. Apple is and always has been a hardware company. Not only that, but they're now a hardware company that can leverage economies of scale with their suppliers.

The reason the iPad is so cheap is because Apple buys components to make it in bulk. In some cases they'll buy the entire output of a supplier. There are also documented instances where Apple have provided the capital for suppliers to expand their production facilities in return for buying the complete output of those new facilities. This is easy to do for certain items that get used across your entire product line, such as flash memory. Doing this means Apple can get parts at prices their competitors can't match, and in return they can sell their products for lower prices. When you have Samsung making and selling you flash memory at a price they can't match for their own subsidiaries, you know you're doing something right. It's amazing planning on Apple's part and a testament to the faith they have in being able to deliver on their product roadmaps. Whatever Chief Operating Officer Tim Cook is getting paid has clearly been worth it.

Re:Anyone know... (0)

Anonymous Coward | more than 3 years ago | (#35414634)

If you don't think the itunes store is going to earn them money in the future you are insane. 8% of their revenues is nothing to scoff at. Apple had 64 billion revenues in 2010. 8% of 64 is like 5 billion dollars. so they make around 1 billion dollars. And it takes 1 billion to run the store...

Hrm. I guess the Itunes is the razor and the hardware is the razorblade. Lol. They really have to fix that with iAds and more revenue. IF they can do that, they can slice their hardware margins more. Using hardware as a funding mechanism to iOS isn't going to last when the chinese OEMs come with Android dogs.

http://static.seekingalpha.com/uploads/2010/6/27/saupload_4733804485_a4f7d7a62d_b.jpg (revenue stats)
www.asymco.com (for running the Itunes Store stats)

It's their retial strategy. (3, Interesting)

mosb1000 (710161) | more than 3 years ago | (#35413920)

Apple runs it's own retail chain that is extremely cost effective (I believe they make the most $/square foot of any retailer). So while their competitors sell products wholesale and end up with two layers of markup (one for them and one for the retailer), Apple handles the marketing and retail aspect itself, and that's where they achieve their savings over the competition. Even the article you're responding to is free advertising for Apple, savings in action. So next time you're complaining about the free advertising Apple gets, keep in mind it's part of the reason you can buy an iPad for $500.

Re:It's their retial strategy. (0)

Anonymous Coward | more than 3 years ago | (#35414436)

This needs to get modded up. This is EXACTLY how they are doing it. When you basically get to factory wholesale to the public, you get to offer much lower prices.

Re:Anyone know... (1)

Trufagus (1803250) | more than 3 years ago | (#35414108)

Apple recently announced that it will be taking a 30% cut on subscriptions. They already take a 30% cut on the App Store. The iPhone5 will probably have NFC and then they will take a cut of every purchase you make in a store, and once again, the size of their cut will shock people.

So, they might be making the bulk of their money from hardware now, but imagine how lucrative all of those 30% are going to be.

Re:Anyone know... (1)

node 3 (115640) | more than 3 years ago | (#35414206)

Apple is not losing money on the iPad. In fact, they are probably prepared to drop the price by $100 if necessary (and in spite of predictions last year to the contrary, it has not been necessary). They are so cheap because of volume and their highly efficient manufacturing and shipment processes.

Take the unibody enclosure of the iPad (and MacBooks) for example. It's *very* expensive to figure out how to do it and you have to build dedicated factories, but once you've done that, you can make a superior case more efficiently than you could make the standard, more bulky, less sturdy, heavier cases.

The other companies had to use their traditional plastic cases for their tablets, which had to be thicker, meaning that in order to make their tablets even close to as thin as the original iPad, they had to spend a lot more money trying to fit the rest of the tablet into less space. They were all aiming at the iPad 1 and missing the mark, they have no chance catching up to the iPad 2 anytime soon.

Re:Anyone know... (2)

ceoyoyo (59147) | more than 3 years ago | (#35414326)

Apple is only known for overpricing things among people who don't actually run the numbers. If you look carefully, Apple generally prices their hardware reasonably compared to similar hardware from other manufacturers, except for things like BTO RAM. What they don't do is offer a budget, cut-the-corners option.

With the iPad Apple has existing experience and supply agreements from the iPhone, they have some chip and industrial design capability in-house and they have all the software infrastructure already built. Just the mass production probably lets them cut the price significantly. Everyone else is starting from scratch.

Plenty of cheap tablets have been released, but anyone who wants to compete directly with the iPad is discovering that they actually have to match it. Unlike, say, notebooks, a tablet that weighs twice as much, is three times as thick, has a cheap plastic case and comes with a pile of adware installed just isn't seen as an equivalent by anyone.

Re:Anyone know... (1)

medcalf (68293) | more than 3 years ago | (#35414392)

Or perhaps conventional wisdom (about Apple pricing) is just two decades out of date, if it were ever true.

Re:Anyone know... (1)

craftycoder (1851452) | more than 3 years ago | (#35413818)

Cheap? The Wall Street Journal had a story about these. Both of them cost about $500 more than the parts used to build them. Obviously they don't cost $500 to put together and ship, so there is a substantial profit margin.

Re:Anyone know... (1)

mosb1000 (710161) | more than 3 years ago | (#35414028)

The iPad starts at $500. I think it's safe to say that your $500 figure is off by at least the cost of the parts (whatever that is).

Re:Anyone know... (0)

Anonymous Coward | more than 3 years ago | (#35414136)

Hate to burst your bubble, but unicorns and pixie dust are free. Jobs scrapes them off in volume during his morning exfoliation.

Re:Anyone know... (1)

rolfwind (528248) | more than 3 years ago | (#35414182)

What?

The base iPad costs $499.

So the parts cost -$1?

That's an interesting theory.

Re:Anyone know... (1)

Nikker (749551) | more than 3 years ago | (#35414480)

For very large values of -1 of course...

Re:Anyone know... (1)

jandrese (485) | more than 3 years ago | (#35413826)

Apple's competitors have been up-speccing their machines quite a lot compared to the iPad. The original iPad has a paltry 256MB of memory compared to the GB most of the Android tablets are packing. They also include faster processors, fancier screens, tons of ports, etc...

But mostly they've been trying to keep profit margins healthy.

Re:Anyone know... (2)

dogmatixpsych (786818) | more than 3 years ago | (#35414418)

Actually, the iPad generally has the fanciest screen. It's an IPS screen whereas I don't believe any of the other tablets are (I tried to find about the Xoom but Motorola didn't say). You also can't compare the RAM of the original iPad to the tablets that are just coming out now; besides, the RAM differences in cost are negligible. It's not about hardware feature differences, it's about supply. Apple designed their own processor (basically) and has all the agreements to get parts at really good prices. It's not that other companies are using much better parts than Apple (they are not), they are just using more expensive (i.e., Apple gets the good discount, other companies don't) parts.

Re:Anyone know... (4, Interesting)

node 3 (115640) | more than 3 years ago | (#35414498)

Apple's competitors have been up-speccing their machines quite a lot compared to the iPad. The original iPad has a paltry 256MB of memory compared to the GB most of the Android tablets are packing. They also include faster processors, fancier screens, tons of ports, etc...

I've not heard of any with better screens than the iPad. Usually they have smaller screens or widescreens (both of which are worse for a tablet). Maybe that's 'fancy'?

The memory and ports mean very little outside of the geek realm.

But mostly they've been trying to keep profit margins healthy.

At the cost of market share? No. They are so expensive because they can't beat or even match the iPad's price. Do you really think they can build their tablets cheaper than Apple does theirs, but are marking the products significantly more than Apple? Isn't the mantra here that it's Apple who is overpriced? So when Apple's prices are cheaper, instead of rethinking that assumption, you just assume Android tablets are so fantastic that they can mark their prices even higher? Really?

Re:Anyone know... (1)

robco74 (855120) | more than 3 years ago | (#35413834)

Likely the same way SWA kept their fares low when fuel prices hit the roof - they spent a bunch of money up front to buy large quantities when the price was low. Apple knows they're going to sell a lot of iPads, so they can negotiate sweet deals and lock in component prices by promising a lot of sustained, steady business. If you know you're going to sell a lot of something without having to do a lot of legwork to move the product, you can cut back on overhead and offer a better deal.

The problem with Android tablets is instead of one manufacturing securing components for a single device, they all have to compete with each other, in addition to Apple. OTOH, Apple has to bear the burden of software R&D that competitors don't. But it's not just about competing products, but competing business models.

Re:Anyone know... (1)

Anonymous Coward | more than 3 years ago | (#35413918)

Likely the same way SWA kept their fares low when fuel prices hit the roof - they spent a bunch of money up front to buy large quantities when the price was low.

They didn't buy up a bunch of fuel and store it. SWA hedged their bets by buying a lot of fuel futures on the market. It was a gamble that paid off and guaranteed their fuel prices would be lower than the market.

Re:Anyone know... (1)

eepok (545733) | more than 3 years ago | (#35413840)

Proprietary hardware and software doesn't hurt. And then there's the guarantee of loyalty-purchases as opposed to the PC market which is mostly of the "let's see who is genuinely better" type of scrutiny.

Add in the massive premium that comes with minor increases in product (+$100 for +16GB of SSD or +$130 for 3G WITH a contract) and the likelihood that those who already loyally buy apple will likely want a maxed out iPad (admittedly pure speculation on my part) and you'll get some decent money on return.

With Apple and the iCulture, there's not much risk in the research, design, and release of a product. With everyone else, it's all risk. Every bit of it.

Re:Anyone know... (2)

jo_ham (604554) | more than 3 years ago | (#35413924)

The most popular ones, based on my visits to an Apple reseller here in the UK are the WiFi only ones, not the maxed out ones. You could buy a maxed out one any time, but there was always a wait list for the WiFi only models.

Re:Anyone know... (1)

keytohwy (975131) | more than 3 years ago | (#35414586)

This is bullshit. For years people have been saying that Apple sells only to the faithful. Yet during most of that same timeframe, Apple computers have been outpacing the industry in terms of growth. Are you suggesting Apple customers refresh their computers more frequently? Or, could it possibly be, that Apple is growing their marketshare by selling to the previously unfaithful and that the halo around iPod, iPhone and iPad that Tim Cook speaks of is genuine?

Re:Anyone know... (0)

Anonymous Coward | more than 3 years ago | (#35413848)

Apple locked in contracts for production and parts (flash memory, screens, etc) years in advance, giving them lower prices and driving up the prices for everyone else. Their products are pretty good, but their market insight and ability to leverage it (thanks to their heap of cash) is even better.

Re:Anyone know... (1)

MoonBuggy (611105) | more than 3 years ago | (#35413858)

Their deliberately narrow range probably helps with the economy of scale - Apple makes one tablet, pumps out a few million of that precise model (give or take a few extra flash chips), designs another, and repeats. Samsung are perhaps spread too thin, pushing up both the relative development and manufacturing costs of each individual product. Apple also have app store purchases as a secondary source of income should they feel the need to cut margins, although that doesn't sound like their kind of tactic - being too cheap risks destroying the 'quality' cachet that they work so hard to market.

The final thing, which often gets lost as partisan debates rage between the pro- and anti-Apple camps, is the fact that, love them or loath them, they have a lot of money and a lot of talented people working for them. That means that sometimes they're going to come out with something that's just flat out better than the competition, at a decent price (and sometimes they'll come out with a mediocre device and stick a huge mark up on it - the difference is that anybody can manage the latter, only a few companies manage the former).

Re:Anyone know... (1)

massysett (910130) | more than 3 years ago | (#35413896)

Analysts and industry experts point to a number of reasons. Primarily, they say, Apple’s deep pockets — a staggering $60 billion in cash reserves — have allowed it to form strategic partnerships with other companies to buy large supplies of components, for example, expensive flash memory. By doing this, the company probably secures a lower price from suppliers, ensuring a lower manufacturing cost.

At the same time, they say, Apple has sidestepped high licensing fees for other items it needs, like the A4 and A5 processors within the iPads. Those parts, designed in-house at Apple by a company that Apple bought, are among the costlier components needed to make a tablet computer.

NYTimes [nytimes.com]

Re:Anyone know... (1)

Antisyzygy (1495469) | more than 3 years ago | (#35413912)

The HP WebOS tablet will be at a similar price point for superior hardware (more ram, faster processor, etc). Its just not as light or as thin.

Re:Anyone know... (2)

BlueStraggler (765543) | more than 3 years ago | (#35414262)

Is not as light or as thin, but you still think it is superior hardware? If you glued your 24" LCD monitor to the side of your PC case and hooked that up to 10 car batteries, would that be an even more superior tablet?

Re:Anyone know... (1)

Antisyzygy (1495469) | more than 3 years ago | (#35414394)

Stop being an idiot. It weighs about a small sandwich more and is maybe a quarter of a pencil thicker. Its a worthwhile trade-off for induction charging (wireless charging), an actual built in digital compass, 4 times the RAM and 20 percent more processing power.

Re:Anyone know... (1)

jbplou (732414) | more than 3 years ago | (#35414510)

I found the demo of the webOS tablet very impressive, much more impressive than what other non-Apple companies have shown in their demos(Dell didn't even have a functioning prototype). However how do you know the pricing will be similar? I haven't seen any confirmed pricing or release date.

HP is a long shot because apple has thousands of apps, huge marketing, carriers giving additional marketing, and strong word of mouth. HP has good a good reputation for printers and high end server systems I don't quite know how well they will market a tablet which(at least so far) competes primarily for users outside of work an area where HP has only a marginal reputation.

If I had to guess HP will over price their product and lose out to Apple in the short run. Look at the Xoom it has good hardware but the pricing looks too high and they resided it to market so fast soom of the features won't work until a software update comes out. I imagine Motorolla did this because they fear iPad 2 will own the market for the next 9 months.

Re:Anyone know... (1)

iamhassi (659463) | more than 3 years ago | (#35413914)

Is it cheap? The iPad is a 9.7" touchscreen with 16gb for $400 [walmart.com] . I can buy a 10.1" 1.6ghz Atom netbook with 1gb RAM and 250gb hard drive for $250. [bestbuy.com] And no, Best Buy isn't running a crazy special, Amazon has two [amazon.com] different [amazon.com] models of netbooks for ~$250 brand new.

True, the iPad has a touchscreen and those cost a bit, but the netbook has a lot more parts and the cost of a Windows 7 license.

I'm trying to figure out why we're not being flooded by $200 iPad clones.

Re:Anyone know... (1)

MoonBuggy (611105) | more than 3 years ago | (#35414120)

Because the iPad is significantly thinner and somewhat lighter. Maybe those things don't matter to you, and if that's the case then you'd be wasting your money, but they do make the engineering more complex and thus more expensive, and they do matter to some people. Build quality is also an issue when you're really racing to the bottom on price. I don't quite know what you mean by 'a lot more parts' - if they achieve roughly the same goal then it really doesn't matter how many parts they use; if anything, small, consolidated system-on-chip tech is likely to be more expensive.

None of this is to say that the iPad is necessarily well priced, and there are already some cheaper tablets out there, but I think it goes some way to showing why there isn't this flood of ultra-cheap clones you predict.

Remember everyone saying iPad was overpriced? (5, Insightful)

guidryp (702488) | more than 3 years ago | (#35413942)

It is amazing how the conversation changes. I remember a year ago, there was a lot of people dumping on the iPad as overpriced, that they could get a more powerful netbook for hundreds less.

Now today, it is all about how is Apple making them so inexpensive.

Strange...

Re:Remember everyone saying iPad was overpriced? (1)

jbplou (732414) | more than 3 years ago | (#35414544)

Before the first iPad launched all the analysts expected it to be priced over $1000. Maybe people who post of slashdot thought it was overpriced, but the business sector certainly didn't and competitors still don't know how to compete with similar price and quality.

Re:Anyone know... (1)

T-Bone-T (1048702) | more than 3 years ago | (#35414004)

They can price it so low because the are more vertically integrated than their competitors. They have a lot of power over suppliers and manufacturers so they can get the quality they want. They have a very good R&D team. They design their own OS so they have lower licensing costs. They also have their own stores. Samsung pays fees to use Android and their resellers demand a cut of sales. Apple doesn't have to deal with that because what they don't sell in their own stores is a small amount used primarily for marketing. Wired had an article about it recently.

Re:Anyone know... (1)

rolfwind (528248) | more than 3 years ago | (#35414164)

Among other things, R&D spread out over millions of units is a lot less than R&D spread out over 100k units.

Re:Anyone know... (1)

threat_or_menace (746325) | more than 3 years ago | (#35414222)

You're starting from a false premise, about what's cheap and what margins ought to be. Granted, that's reinforced by the pricing on the unlocked Samsung (500-600 in the US) and the pricing on the Motorola tablet.

Take a look at the Barnes and Noble Color Nook, a 7" wifi android tablet with an IPS touchscreen that sells for $250. It's a solid enough build that tons of folks are happily rooting and overclocking them.

Re:Anyone know... (2)

jbplou (732414) | more than 3 years ago | (#35414594)

Toons of people are rooting them, perhaps literally tons of people. Because it is probably a few hundred to a thousand worldwide. I don't think anybody at Apple is sitting up late at night worried that the normal consumer is going to root ereaders. People want something that works with little configuration. Home users buy the iPad because it's like a small laptop that starts apps instantly , can browse they web, doesn't require constant virus scan updates, and little configuration.

Nerds might not mind rooting a tablet but for Jon Q Public who considers setting up a pop email account difficult it is not an option.

Re:Anyone know... (0)

Anonymous Coward | more than 3 years ago | (#35414252)

The only advantage Apple has, is that it sets trends, and because of that they're always a step ahead of everyone else.

Re:Anyone know...Yes. (5, Insightful)

sunfly (1248694) | more than 3 years ago | (#35414424)

Yes, it is very easy actually.

1) They have huge quantities of scale. While other manufacturers are making 100's of models, Apple focuses on a few. Easier to get great prices on millions of the same part, then to get prices on thousands of different parts with retooling in between.

2) That huge cash reserve? They are using it to hedge prices. For example they are pre-purchasing key components so that the manufacturer does not have to add in risk costs for unknown future prices. They are also sharing the cost of new manufacturing facilities as part of a contract to get better prices. Hard to compete when you can't buy components because they have bought up half the supply, leaving everyone else to fight over the other half.

3) The entire company is ran very lean, probably the biggest lean manufacturing company in existence. Since all their effort is very focused, they do not have the overhead that most other companies their size have. Check out their R & D spending versus sales. Incredible.

For those that think they are running razor thin margins to get iPad hardware sales to make it up on the back side, you do not know Apple very well. They make healthy margins on everything they do. They have even hinted that they could drop the prices on iPads if they need to and still make a lot of profit. They are a public company, check it their filings.

Re:Anyone know... (1)

mikeiver1 (1630021) | more than 3 years ago | (#35414472)

The reason is simple... Apple know that there is a very large untapped market that they WILL sell to. They know that there are idiots that will buy it simply because it says Apple on it and they think it flew out of Jobs ass. Therefor it must be wonderful and they must have it. Simply put, Apple knows that they are going to sell a boat load of the things and negotiates parts and assembly based on those huge numbers. Samsung on the other hand is just another pretty face in the crowd but they don't know if they will be picked up and taken to the ball. They could be stuck with a bunch of tablets that just sit on shelves and cost them and the retailers a fortune. The only way for them to have a go at apple is to throw their whole unflinching effort behind the tablet and future development and maintain a very strong support structure. Very likely that they are not going to do this. Personally I hate Apple and their holly, we know what is best for you, attitude. Their DRM sucks and i will not support them. I also have a real tablet A TC1100.

Re:Anyone know... (1)

jrumney (197329) | more than 3 years ago | (#35414530)

how is Apple making the iPad so cheap?

iTunes

No manufacturer that is shipping Android based hardware has the option to subsidize the hardware with a 30% cut of all the media, apps and content that gets loaded on the device.

Change (1)

tekgoblin (1675894) | more than 3 years ago | (#35413740)

Apple didn't really add anything different in the iPad 2 that other competitors didn't already have. However it was thinner and cheaper than the Galaxy Tab. But, I would pay more for more features if the Tab has them.

Re:Change (4, Insightful)

peragrin (659227) | more than 3 years ago | (#35414044)

but would you pay more to beta test it too?

The xoom is shipping with a broken sd card slot, no flash(other than the ads saying it has it) and if you want the full 4G modem your paying for you have to mail the unit it)

spending more for a crippled unit doesn't sound right. Apple should be doing that not everyone else.

Re:Change (1)

markdavis (642305) | more than 3 years ago | (#35414426)

The SD slot isn't broken, it is just problematic with the fast release of Android 3.0. It will be "fixed" pretty soon, I am sure.

Flash will be available in a few weeks according to pretty reliable sources. Apple doesn't have Flash anyway, so that is a poor comparison point.

4G modem only matters on the overpriced non-WiFi-only model, which few people want.

Not that I am defending Motorola... they pushed the product out a little too quickly. They were desperate to beat Apple's release of the iPad2. And they made it, but so what? Since they didn't release the WiFi-only version, which is what 90% (?) of prospective customers want, it is a hollow "victory". I just wouldn't characterize the Xoom as "crippled" like you did.

Re:Change (1)

peragrin (659227) | more than 3 years ago | (#35414660)

They won't release a wifi version too. every xoom indeed every android device will always have a 3G or 4G modem or lose all access to google marketplace. Since there is no competitor to google marketplace for android there will be no wifi only devices. You must pay for the the 3G connection and then disconnect it later. Always making android device more expensive for wifi only.

Flash is dependent on adobe and like all mobile flash is fundamentally broken for 50% of the flash api's out there.

shipping with a non functional SD card slot is stupid. Such an update that may or may not get blocked by the carrier. what happens when you spend $800 on a device and $30 a month only for verizon to say no you can't have that update. that is a very likely scenario.

Hopes (1)

Nerdfest (867930) | more than 3 years ago | (#35413784)

It'll be nice to see some better competition. I'm even willing to pay a bit more for a device with a USB host that I can run any software I want on, but there's a limit. I'd actually be really happy with one of the $100 7" Chinese tablets running Android if they had a proper capacitive screen. Hope production costs on them drop soon.

bigger costs more, say it isn't so (2)

rjejr (921275) | more than 3 years ago | (#35413812)

So Apples new iPad 2 with the same size screen is the same price as the old one (with the same size screen) and Samsung's newer model with a much larger screen costs more so Samsung needs to think over pricing? Is their VP drinking the Apple Kool Aid? And seriously, does the skinnierness even matter? Sure, the rounded edge looks a helluva lot better than the old flat edge, but if it was the same thickness would anybody die? That new cover is very way cool though. All the 3rd party accessory guys must be going "thank god it isn't backwards compatible".

Re:bigger costs more, say it isn't so (2)

gstrickler (920733) | more than 3 years ago | (#35414588)

The problem isn't just that the Samsung is more expensive, it's that it's a lot more expensive. Even the 7" Galaxy tab is priced well above the 9.7" iPad/iPad2, and the 10.1" version was expected to be even more expensive.

What Samsung really needs to rethink... (1)

stox (131684) | more than 3 years ago | (#35413862)

is their updates to software and the quality of those updates. As an example, Samsung Epic 4 owners have waited many months for the update to Froyo. Finally, an update was pushed out recently, and promptly withdrawn. A working update is still not shipping.

Re:What Samsung really needs to rethink... (0)

Anonymous Coward | more than 3 years ago | (#35414062)

Samsung needs to stop using their faulty RFS and other Android modifications and leave it to Google (use the Nexus S code, dammit!)

iPad 2 is already old (1)

countertrolling (1585477) | more than 3 years ago | (#35413880)

Wait until after the holidays for a discounted iPad 3

Re:iPad 2 is already old (1)

WillAffleckUW (858324) | more than 3 years ago | (#35413922)

no, the iPad3 releases for Xmas 2011 - and the 3D tech in it means kids will be getting one under the Xmas tree so they can play Angry Birds and Pokemon on it.

They won't drop the price on that until after the iPhone5 releases, and probably not until the next gen iPad that follows.

Shareholder CC (2)

bmacs27 (1314285) | more than 3 years ago | (#35413940)

In all of the shareholder conference calls they've explained away the dropping margins as "aggressive pricing of the iPad in order to take advantage of Apple's first mover status." Apple wants to own the tablet space. So far... they do.

Umm actually this isn't true...Samsung Denies it (2)

grapeape (137008) | more than 3 years ago | (#35413978)

http://mobilized.allthingsd.com/20110305/samsungs-10-inch-tablet-to-ship-as-announced-despite-apples-ipad-2-announcement/?mod=ATD_rss [allthingsd.com]

“We will continue to make every effort to provide the most powerful, well-designed and productive mobile device to customers,” Executive Vice President Lee Don-Joo is quoted by Yonhap as saying.

A Samsung spokesman told the outlet the release plan for the Android-based Galaxy Tab 10.1 has not been affected, but declined to say when the device will ship.

Re:Umm actually this isn't true...Samsung Denies i (0)

Anonymous Coward | more than 3 years ago | (#35414204)

Shhhhh... keep your "facts" and "reality" to yourself. You are interrupting the 5th consecutive Apple fanboy circlejerk story on slashdot today.

Re:Umm actually this isn't true...Samsung Denies i (1)

rolfwind (528248) | more than 3 years ago | (#35414258)

A company denying something doesn't make it not true. Doesn't make it true either.

This is ridiculous (1)

Antisyzygy (1495469) | more than 3 years ago | (#35413980)

Apple's iPad competitors are still spec-obsessed, and Apple's next-gen iPad coupled with the same price point is forcing Samsung to rethink its tablet strategy and pricing methodology altogether.

Seriously. What kind of moron CEO's and board members exist these days? Its obvious that Apple released a killer product and yet these idiots do nothing to try and compete. It was pretty much already known what the iPad 2 would have in it, and yet they did nothing but wait until it was released and NOW they are trying to rethink their strategy? Any two-bit / . moron could do a better job than these idiots and yet they are pulling in hundreds of thousands to millions a year plus bonuses. It just goes to show you that being a CEO or CFO or CIO doesn't mean shit as far as your intelligence goes. It must be social connections that get these assholes into their undeserved positions.

Re:This is ridiculous (0)

Anonymous Coward | more than 3 years ago | (#35414138)

Dude, they had a product in the pipeline and realized that it would be lame compared to the iPad 2 and therefore; wouldn't sell or at least wouldn't sell at the price and margins that they want.

Apple out flanked them and they're regrouping.

Re:This is ridiculous (1)

Antisyzygy (1495469) | more than 3 years ago | (#35414502)

Apple didn't out-flank anyone. What they did was expected by numerous "apply analysts". It wasn't expected that they would release an iPad with the same amount of ram as the last one. Thats the perfect place to take advantage and yet no-one did shit.

Re:This is ridiculous (1)

shutdown -p now (807394) | more than 3 years ago | (#35414598)

What was not known is that prices for the original iPad dropped by a hefty $100. That places bottom-of-the-line iPad square against netbooks, and is a hard price point to compete against, even with extra features.

Waitaminute... (1)

Sloppy (14984) | more than 3 years ago | (#35413990)

Competitors come out with new products? When did this start happening?!

Oh well, back to the drawing board, Samsung. It should only take a year or two to develop something that you can be assured, will totally crush your all competitors' 2011 products.

Snore. (0, Insightful)

Anonymous Coward | more than 3 years ago | (#35414010)

Since this quote came out last week, Samsung woke up and realized that the greatest feature of the iPad2 is hype. Samsung has more recently chosen to return to the original game plan and just come out with the Tab 10 the way they designed it.

Fanbys will be fanboys. A faster, better, cheaper Android tablet will not influence the diehard Apple fans to even hint at looking away from the iPad2. Tech savvy Apple haters will buy a Xoom or a Tab 10. Everyone else will either be influenced by the extremist nuts closest to them, or just wait until tablets are more useful and better priced. Until then, these flame wars are nothing but petty conjecture.

Stop it, now! (1)

Nemyst (1383049) | more than 3 years ago | (#35414070)

Big players like Samsung must stop playing catch up, now. Stop looking at Apple and monkeying them, that'll get you nowhere. Nobody wants a copycat. Branch out in your own directions or *gasp* outpace Apple. Pour money into research. Raise the quality of your products. Release more timely updates for longer. Yes, it can be risky, but look where that got Apple. They literally created the tablet market.

You can innovate, but not if you're doing your best to be a follower.

Re:Stop it, now! (1)

sunfly (1248694) | more than 3 years ago | (#35414448)

Great idea. Sadly not in very many companies DNA to actually pull it off.

Re:Stop it, now! (0)

Anonymous Coward | more than 3 years ago | (#35414704)

In other words, ditch Android, and build your own platform and refresh your industrial design team?

It's obvious what the problems are:
1) Moto and Samsung design hardware. Has no software skillz.
2) Google designs software. Has no hardware skillz.
3) The hardware and the software isn't well integrated. (non-working SD slots? wtf?)

But that can't be used as a 3 step process to get back on track. For Samsung to become a leader, it needs to control the software schedule and integration, which means growing an army of programmers and designers. That costs money.
Progressing towards being a leader also means that they need to be able to sell it at a competitive price. Pricing it lower is banking on selling a ton of these things, or else they'll simply lose money on R&D. (This here's why we don't see $400 Android tablets that don't suck.)

don't compete on specs (5, Insightful)

RapmasterT (787426) | more than 3 years ago | (#35414114)

Its' too little too late. Don't even try to compete on specs, or other bullshit...compete on price and targeted use. Get a $100 capacitive touch screen tablet that is little more than a portable web browser...watch how many you sell. I'll take 3 today. Hell, I'll sell my ipad and buy however many I can with the proceeds.

Re:don't compete on specs (1)

Anonymous Coward | more than 3 years ago | (#35414274)

Like a crunchpad?

Re:don't compete on specs (1)

trawg (308495) | more than 3 years ago | (#35414682)

Sir, I would like to buy your $100 tablet!

I would happily shell out for something like that - probably a couple of them - to have lying around just to check stuff out online easily. I can happily live without the apps ecosystem of the iPad; almost everything that is an "app" that I'm remotely interested in is just a simple front-end to webstuff anyway.

I love the idea of an iPad for that reason, but I can't justify the expense.

Futility. (0)

Anonymous Coward | more than 3 years ago | (#35414390)

Why Don-joo stop trying to compete with iPad and do something else.

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