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back to article Tablets need permanent Black Friday price slash to triumph

Punters could be tempted to buy a non-Apple fondleslabs, but only if prices tumble – and that could be about to happen, say analysts. The iPad remains pretty much unchallenged and although Samsung, Asus and Acer have made the best stab at taking on the US tab titan, Amazon's loss-leading Kindle Fire (our review) is the device …

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Silver badge
WTF?

Low margins?

Seriously? I can't believe that Apple don't have the highest margins in the fondleslab game. Otherwise they wouldn't be playing.

A better phrase would have been that they are not prepared to compromise those margins and dabble with the peasants.

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Ru
Silver badge
Stop

Low margins, yes

No-one really expected Apple to compete on price here, but why else do you think that spec-equivalent fondleslabs from other manufacturers are so expensive?

Consumers are used to Apple being a premium brand, and all other brands are expected to undercut them.The fact that they cannot is one of many reasons why the iPad effectively has the whole market segment to itself. Its a neat trick, and one that I'm sure you can appreciate.

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Holmes

Supply Chain Constraints

The other reason is that for a number of key components, Apple pretty much bought up a huge chunk of the production capacity. For everyone else therefore, the supply is extremely limited, and they're having to pay premium to get any at all.

Apple also have a pretty darned slick supply chain operation overall.

Both of these means that they have a lower cost base that the competitors just cannot get near, so Apple can make much better margin and *still* offer competitive (or lower) prices.

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Pint

"...So far Apple has not budged on price..."

They on sale RIGHT NOW. Apple's Black Friday (25 Nov 2011) shows moderate but non-trivial discounts on their Apple Store websites in USA and Canada.

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FAIL

Someone is obviously fond of using terms found on Urban Dictionary.

Was it necessary to use the word "fondleslab" so many times throughout the article? Did you think it was cute and cheeky? Maybe the author could have gotten away with it once, but by the second paragraph it became a game to see how many times the author would use it.

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(Written by Reg staff) Gold badge

Re:

You may be right - but the term "fondleslab" was coined by Lewis Page of this ilk.

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Law
Paris Hilton

And if Lewis Page jumped off a cliff would you jump after him?

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(Written by Reg staff) Gold badge

Re:

Goes without saying, surely...

...It is entirely understandable if reporters are fond of neologisms coined by one of their own.

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Only if he said "simon said."

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Anonymous Coward

fondleslab

was used all of 3 times!!! OMG. end of the world. You clearly must be a fondleslab fanboi to see something objectionable in that

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FAIL

Funny that you say that because when I was a reporter the one rule we had in all the newsrooms I worked in was that you never use slang.

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Anonymous Coward

How exactly will prices tumble? Of course customers liked the price of the HP Touchpad during the fire sale but HP lost money doing that. Amazon are selling the Kindle (hardly a true iPad competitor) at just less than cost, obviously banking on making up the money in sales from their massive media library.

The fact is the other manufactures can't match Apple's iPad price, with an equivalent device, and make a profit let alone undercut it.

Who are these analysts and how much have they been drinking?

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Ru
Silver badge

Manufacturers can match Apple's price with an equivalent device, but that isn't enough. People don't want to be paying Apple prices for non-Apple products, after all! There are a number of very nice Android tablets out there, but no-one wants them because they have no value. Tablets are basically toys to almost everyone, and if you're not showing your fancy brand affiliation what is the point of getting one?

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Go

could be though

my gut feeling says that the weight of amazon behind the even more consumer oriented fire will make the fire a real competitor. Probably the only serious competitor of ipad (because it offers also rich media, something you don't have natively with android). But they will have to create an ecosystem for it, for instance a way of wireless transmission to a tv a la apple tv.

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Anonymous Coward

The reason people don't buy Android tablets is because so far they have had a crap OS with no real apps.

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AC let me fix that last sentence for you.

Who are these analysts, what , and how much of it have they been drinking?

I want some.

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Windows

pah

<<"It seems that consumers have tended to play safe and buy on the strength of the Apple brand; however, we are expecting factors like operating systems, apps and interworking with existing devices to become part of the decision-making process.">>

now there you're wrong. exactly because of the interworking, operating systems and apps I bought the ipad (and the imac, macbook air and an iphone for my wife so yeah it's interworking within the walled garden, but nobody else offers anything similar walled or not walled). that's where apple really nailed it. To the point that it's become a major software house in my eyes. Those who don't get that shouldn't be called <<experts>>.

*windows user, well because I am a pc and a windows phone.

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But Apple can take the hit...

Apple can run at or near cost on its iPads for a few reason:

- The end to end consumer experience. If you enable all the iCloud settings, everything seemlessly moves between devices. If you take a photo it appears on all iDevices and your laptop/mac. It goes the other way too (laptop->iDevice). Plus "cute" features like purchasing music/movies/TV/apps in one place moves it to all places. In households with more than 1 device this feature is seen as a big value add.

- It takes a cut of ~30% on all iTunes/App store sales. This is funneled back into making the initial cost of the device a lot more palletable to Apple. (Think about it - how many 99c/79p purchases do you make on the device? I can think Ive probably underpinned apple to an additional $75-$100 already).

With the Android model, there is no pushback to the tablet maker on app purchases. This means they have to be at a profit on each device. Only Amazon could hope to emulate the iPad model with tie-ins to purchases on the Amazon site. Any and all other apps payed for just go to google and the app developer.

And I certainly havent seen anything close to point 1 on the non-Apple tablets - although I'm happy to be corrected as people have been asking me for ideas too :)

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Apple say they don't make much money from the app store, and I believe them.

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Politicians and press people

You can't take any statement at face value. Apple may not make much money direct from AppStore sales. But I am sure that they don't keep it available as somesort of philanthropic gesture.

The £5 they get from the punter in monetary terms is nothing compared to the symbolic buy-in that that purchase represents. When their iDevice gets lost stolen (or almost becomes unusable as a result of an os upgrade) then that £5 becomes part of the consumers decision making process.

Taken all in, the value of people's app store purchases will become more and more the monopoly making factor.

I wonder how apple and the doj would have acted off MS had added an app store to windows in the late 90's.

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Gold badge

Prices have already dropped...

I got a 7" tablet, 800mhz CPU, 256MB of RAM, 4GB storage (and open microSDHC slot) for $88 about a week ago (i.e. not a "black Friday" sale). Just like the Kindle and such, no Market, but I added it in a few minutes. Done and done.

People are comparing the most expensive slabs on the market and saying "Well, these are almost as much as the IPad!". Well, yeah, if you compare like an Alienware computer, or overpriced Sony notebook, you'll find Apple-like prices too. There's a lot cheaper kit on the market.

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The problem is the cheaper kit is rubbish.

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When is a tablet not a tablet?

"Seven-inch models represented just 2 per cent of volume tablet sales"

Unless you factor the Nook Color's sales into the numbers.

Why was it the NC counted as an e-reader, so was excluded from any 'tablet' sales figures, but the Kindle Fire is deemed a tablet? Both are crippled and restricted to the insides of their walled gardens in much the same way unless rooted/hacked. Personally, I think excluding the NC has skewed both reports and perceptions of the market over the past 12 months.

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Thumb Up

Regardless of the solution or how manufacturers will get there, I believe the analysis is spot on. The iPad was fun, but I'd really like the freedom of an android tablet. It will be my personal computing platform. My phone already is; the only thing its lacking is a larger interface. However, it *is* the pricing that has kept me from purchasing thus far. I have a feeling we are on the tipping point of those falling though.

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Bronze badge
FAIL

The non Apple Tablet makers don't get it. No one is going to pay an iPad price for anything other than an iPad. Everyone else has tried it and failed. Hopefully they will learn from this and bring new tablets to market at prices below Apple, because that is the only way that anyone who wants a Tablet is going to buy something other than an iPad. This isn't my opinion. These are the facts as proven in the market place. People stand in line to by iPads at launch at full price and continue to buy them at full price afterward. Android, RIM, and HP Tablets were not leaving shelves fast at iPad prices. It's a fact of life that the OEM's need to learn from. Another year of them all trying to sell Tablets at iPad prices while few people are buying them and Apple can't make enough to sell at $499, is going to make all the other tablet makers look like idiots.

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Silver badge

"No one is going to pay an iPad price for anything other than an iPad."

I will add one word... "Yet".

When Android phone's first appeared, nobody was going to pay iPhone prices for them, because they could get an iPhone for that. Therefore lower priced Android phones appeared, allowing Android to make a big push into the market.

Now many are prepared to pay MORE for an Android phone than and iPhone.

This is what needs to happen with tablets. Devices like the Fire need releasing to allow the Android Tablet to make a big push into the market. Once this happens, people will be more likely to look at higher-priced models.

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Android rocks

I'm typing this on my Acer Iconia A500, which I regard as an excellent buy: sturdy (read: heavy-ish), fast, well featured, full-sized USB port, plays DivX out of the box, streams video and music perfectly via BSPlayer, etc. I deliberately steered clear of an I pad because of my dislike for iTunes, cable connections and the almost mandatory conversion of a large video library to MP4 format. So I did not exactly save any money, but the Iconia continues to be worth every cent I spent. Oh, and because I like Android so much - am still very comfortable on DOS command line - I bought a 7" Galaxy Tab as well, for when the kids have my big Acer for games...

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FAIL

Cable Connections..?

Point of information: since iOS5, iPad has connected wirelessly to iTunes & iCloud for content updates, and for s/w updates.

Wonder how many of your other assumptions are unresearched, Android fanboi rumourmill, bullshit FUD too..?

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Yeah, Apple are really catching up - iOS5 has been out a couple of months yet Droid has done it years.

The SECOND Apple finally do something that the competition have done for ages Apple fanbois are all over it.

Unfortunately for you, some of us have a memory longer than that of a goldfish

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Anonymous Coward

Tablets

Got the Advent Vega for 140 quid, running Vegacomb. Fantastic device and o/s. Yes, the iPad is a little more polished, but there *are* excellent, much cheaper devices out there that do pretty much everything your iPad will do.

(I'm not anti-Apple, as my Jesus phone suggests)

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Silver badge

Yawn

I would have thought that said analysts only needed to read the comments at el reg, engadget, etc. to come up with such a statement of the bleeding obvious

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Anonymous Coward

Am I misremembering

I thought the teardown specialists at iSuppli (see what's in these things and work out how much they cost to buy and build) had already said that stuff like the Kindle is near-zero margin. Or am I misremembering?

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FAIL

Near Zero Margin on Teardown

Near Zero Margin based on a parts inventory translates to a bloody huge loss on a fully manufactured and distributed device.

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Re Seven-inch models represented just 2 per cent of volume tablet sales in August,

Yes, well there aren't as many of them. And until the Kindle Fire and Kobo Vox they were no cheaper than the 10 inchers.

I had a play with the Vox in W H Smiths, and judging by the 20 or so dummy boxes, they expect to shift them. It's slower than the Fire apparently, which doesn't worry particularly. I just want something that fits the size gap between my smartphone and netbook for email and web browsing.

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Childcatcher

me and my fondleslab

got a hp touchpad 32 gb for 200 quid (with the mandatory touchstone and case) and dualboot with cyanogen android rom and am happy as a bunny. Webos is fantastic for music, browsing and when I want to read docs or cache news to read while out of connection I pop over to android.. Cool.. Cannot have asked for more. I sold my iphone after went mental with itunes.. Won't buy an apple product ever anymore..

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kinda lite

Heavy on hyperbole, light on facts.

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Silver badge

Analysts said Windows Phone would move 30M Y1

"Analysts" have got not much traction with me. I've been watching them for many years and they're as reliable as pigeon entrails for predicting the future.

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