Tablet Manufacturers Reevaluating Pricing Options in Light of iPad Announcement?
DigiTimes reports that several Asian notebook manufacturers were taken by surprise by the unexpectedly low entry-level $499 price point for Apple's iPad, forcing them to reconsider how they will price upcoming tablet models.
The vendors originally planned to offer prices pegged at 20-30% lower than the Apple iPad, while they generally expected the device to cost as much as US$1,000. The US$499 entry-level price has caught vendors by surprise and means they will now need to adjust their price scales even lower to attract consumers, the sources pointed out.
The report notes that manufacturers are reluctant to undercut the iPad price and start a pricing war for fear of eliminating profit margins even before the industry can really take hold. The fears seem justified in light of plunging netbook prices, which have reduced profits in that segment to razor-thin margins even as unit sales have exploded.
Reports as long ago as last August claimed that tablet manufacturers were holding off on new designs for their products until they could see what Apple's contribution to the market would be.