Sign in Subscribe
News agencies

Tablet Makers Prepare for Price War Against Apple

Strategic Insights

— 1 min read

As hardware makers such as Research In Motion (RIM), Hewlett-Packard Inc. (HP), and others introduce new tablets, analysts predict a price war to chip away at Apple Inc.'s market lead. Apple's iPad has grabbed a significant share of the market with sales of over $2 billion in its first quarter, but rivals are now positioning themselves to compete with lower prices. The iPad is expected to hold a majority 84% of the market this year, according to market-research firm ISuppli Corp.

Key Takeaways:

  • Analysts predict a price war among tablet makers, with companies like RIM, HP, and Acer Inc. planning to sell tablets at lower prices to compete with Apple's iPad.
  • The iPad is expected to hold an 84% market share this year, according to ISuppli Corp.
  • RIM's new PlayBook tablet, set to launch in early 2011, will be sold at a "very competitive" price, with estimates suggesting it could cost as low as $299.
  • Other companies, such as Toshiba Corp. and Dell Inc., are also offering low-cost options, with Toshiba's Folio 100 tablet costing less than the iPad and Dell's Streak tablet available for as low as $299 with a two-year contract.
  • Analysts believe that Apple may eventually introduce lower-priced iPads to compete with the competition, citing the company's approach with the iPhone.
  • The competition could lead to narrower margins for Apple, with investors monitoring the situation closely.

Statistics:

  • iPad sales exceeded $2 billion in its first quarter.
  • The iPad is expected to hold an 84% market share this year.
  • RIM's PlayBook tablet may cost as low as $299.
  • Dell's Streak tablet is available for as low as $299 with a two-year contract at AT&T Inc.
  • Gross margin for Apple Inc. was 39.1% in the third quarter.
  • RIM's gross margin was 44.5%, while HP's was 23.8%.
  • Tablet sales could top 50 million next year.

Sources:

  • Bloomberg News
  • AP file photo
  • 2010 Toronto Star
  • ISuppli Corp.
  • Sterne Agee & Leach Inc.
  • Gartner Inc.
  • Gleacher & Co.

Read more