A $99 tablet is not going to lose money. People are way overestimating the cost of a tablet.
In fact, the biggest cost is just the touchscreen and the glass associated with it. A dual-core CPU is dirt cheap as well as 8GB memory. The cost of such 7" tablet could be as low as $50-60, as long as you strip away most of the ports/buttons, and use some cheap shell. The software is expensive to develop but in this case, it's 'free-riding' the software for other devices.
Companies who business model is not based on selling hardware but giving it away usually destroy those markets. If in fact a company can give away products at a loss and make it up with their other business, that shows you how much money they are making else where.
I find it interesting that people complain how much apple makes, but no one is complaining that Google is making far more from selling your personal information to the highest bidder and they do not pay you. They give you carpware for you to test for them and tell them all the things that do not work just so they can collect information about you.
The recent Toshiba ad "it is unethical to test unproven product on the public" is really pointing at Google in most cases these days.
I'm sure Apple won't join in the 'race to the bottom' on price, but continue to look to the quality end of the market. None-the-less some price pressure on Apple due to competition will not go amiss.
I don't mind paying for quality, but what really annoys me about Apple iPad prices is the premium charged for higher storage capacity. In the UK it's an extra £80 ($128) for a 32Gb iPad over a 16Gb one, when the difference in cost of parts is a few $. And it's to Apple's benefit to sell higher capacity devices - more room for sales of Apps and content through the App Store & in-App purchases.
All manufacturers do this though. I assume it's to balance out their margins. What other way could they use as a price differentiator? Should they clock the processors different? It'd make things complicated for the buyer and their experience. They could just make one model "iPad 64GB" and price it close to the 32GB price, but that raises the price barrier to entry.
Google's stupidity is exceeded only by Google's stupidity. They will lose money on every unit but make it up on volume.
They've been pretty successful for being so stupid. Much "smarter" companies have failed, and miserably. In fact there was a time that Apple wasn't so successful even tho their products were impressive and hardly given away.
This is the same game microsoft is playing, except microsoft is really inept (it's starting it's race at the top, and will wipe out all it's OEMs).
This will bifurcate the tablet market just like the phone market... the 'cheap' consumers of content (I want a portable web viewer and a couple free apps) will flock to the low 'almost free' tablets, and those that 'value' content and experience will continue to buy iPad. Expect a 60-40 split with Android(amazon,nook, and every other eyeball grabbing corp) being the 60.
It's a scorched earth policy now for Google and Microsoft, They have to 'own' their ecosystem, and 'winning' to them is all about establishing a user population by spending money to buy them. Eyeballs and CC#s are the game now, And Apple and Amazon are the clear winners at the moment, and with Apple effectively controlling it's platform, Google and eventually, microsoft, need to give away hardware to catch up, which kills OEM partnerships and degrades the user experience (You won't see them give away an iPad quality device for $99).
The silly thing is, that every one developing an app will also develop it for iOS, and with it's CHI guidelines, it will be easier to write and more effective than trying to write an app for 'Android' (at 3,4,5,6,7,8,10,11,14,19" at every possible geometry, and varying sound/touch/connection interconnection, and obtw, supporting from 2.2 to 4.1 versions), So in the end, there will be no killer app for Android, as consumer grade apps will be 'funded' by sales/use in the iOS space. It will be really hard for Google get some 'stickiness' beyond the technophiles and apple haters.
Econ 101 says that a higher price invites entry. How's it a barrier to entry?!
Hi!
For competitors yes, but not for consumers buying Apple products. I'm saying Apple's advertisements always say "starting at...." if they only have one iPad model that will be one price, it will be higher than the current price of a 16GB iPad while keeping their margins.
A $99 tablet is not going to lose money. People are way overestimating the cost of a tablet.
In fact, the biggest cost is just the touchscreen and the glass associated with it. A dual-core CPU is dirt cheap as well as 8GB memory. The cost of such 7" tablet could be as low as $50-60, as long as you strip away most of the ports/buttons, and use some cheap shell. The software is expensive to develop but in this case, it's 'free-riding' the software for other devices.
'cheap shell'
'strip away ports'
'8gb'
'dual core (in a quad core world)'
You make me all itchy in anticipation. Oh, and given your list, I'm assuming that we're not buying a battery life either ('thinner' will require a higher quality battery and/or some custombattery configuration).
You forget R&D, manufacturing costs, shipping, returns (defects or just dissatisfied users), marketing, retail costs (bodies at the cash register and the minimum margin the big box stores want). I'm assuming at the moment (for the next 18 months, until Moore's Law kicks in), the base cost of the device likely around $150-$200 including all of those elements, to 'break even.' And the last I saw, Google is not a 'not for profit' company.
This is a dangerous game for Google! Apple is running from anything Google because they decided to play in the hardware space, other manufacturers will follow suit if Google continues to undercut them. It won't be just Maps either... search, mail, OS, etc. That will hurt in the long run!
Comments
A $99 tablet is not going to lose money. People are way overestimating the cost of a tablet.
In fact, the biggest cost is just the touchscreen and the glass associated with it. A dual-core CPU is dirt cheap as well as 8GB memory. The cost of such 7" tablet could be as low as $50-60, as long as you strip away most of the ports/buttons, and use some cheap shell. The software is expensive to develop but in this case, it's 'free-riding' the software for other devices.
I find it interesting that people complain how much apple makes, but no one is complaining that Google is making far more from selling your personal information to the highest bidder and they do not pay you. They give you carpware for you to test for them and tell them all the things that do not work just so they can collect information about you.
The recent Toshiba ad "it is unethical to test unproven product on the public" is really pointing at Google in most cases these days.
Quote:
Originally Posted by tomhayes
I'll wait for the $29 dollar tablet.
You'll have to pay me $29 to buy an Android tablet.
Anyway, this move by Google -- if true -- is great news for Apple: it will ensure that the Android tablet market is totally killed off.
Quote:
Originally Posted by kevt
Good for consumers.
I'm sure Apple won't join in the 'race to the bottom' on price, but continue to look to the quality end of the market. None-the-less some price pressure on Apple due to competition will not go amiss.
I don't mind paying for quality, but what really annoys me about Apple iPad prices is the premium charged for higher storage capacity. In the UK it's an extra £80 ($128) for a 32Gb iPad over a 16Gb one, when the difference in cost of parts is a few $. And it's to Apple's benefit to sell higher capacity devices - more room for sales of Apps and content through the App Store & in-App purchases.
All manufacturers do this though. I assume it's to balance out their margins. What other way could they use as a price differentiator? Should they clock the processors different? It'd make things complicated for the buyer and their experience. They could just make one model "iPad 64GB" and price it close to the 32GB price, but that raises the price barrier to entry.
Quote:
Originally Posted by AppleGreen
Google's stupidity is exceeded only by Google's stupidity. They will lose money on every unit but make it up on volume.
They've been pretty successful for being so stupid. Much "smarter" companies have failed, and miserably. In fact there was a time that Apple wasn't so successful even tho their products were impressive and hardly given away.
Quote:
Originally Posted by PhilBoogie
Ah good, Google showing its true colors. Cheap-skates as they are. Then again, the news comes from DigiTimes.
I was about to mention that. Since when do AI forum members believe DigiTimes articles?
Congratulation Andy. You're about to make Android a commodity.
This will separate Apple from the rest.
Quote:
Originally Posted by smiffy31
The race to the bottom has just moved up a gear.
+1
This is the same game microsoft is playing, except microsoft is really inept (it's starting it's race at the top, and will wipe out all it's OEMs).
This will bifurcate the tablet market just like the phone market... the 'cheap' consumers of content (I want a portable web viewer and a couple free apps) will flock to the low 'almost free' tablets, and those that 'value' content and experience will continue to buy iPad. Expect a 60-40 split with Android(amazon,nook, and every other eyeball grabbing corp) being the 60.
It's a scorched earth policy now for Google and Microsoft, They have to 'own' their ecosystem, and 'winning' to them is all about establishing a user population by spending money to buy them. Eyeballs and CC#s are the game now, And Apple and Amazon are the clear winners at the moment, and with Apple effectively controlling it's platform, Google and eventually, microsoft, need to give away hardware to catch up, which kills OEM partnerships and degrades the user experience (You won't see them give away an iPad quality device for $99).
The silly thing is, that every one developing an app will also develop it for iOS, and with it's CHI guidelines, it will be easier to write and more effective than trying to write an app for 'Android' (at 3,4,5,6,7,8,10,11,14,19" at every possible geometry, and varying sound/touch/connection interconnection, and obtw, supporting from 2.2 to 4.1 versions), So in the end, there will be no killer app for Android, as consumer grade apps will be 'funded' by sales/use in the iOS space. It will be really hard for Google get some 'stickiness' beyond the technophiles and apple haters.
Quote:
Originally Posted by Timbit
Bing is a Microsoft owned search engine, so I highly doubt Apple would use them.
I agree it's unlikely, but remember the saying, "The enemy of my enemy is my friend."
Quote:
Originally Posted by OriginalG
... but that raises the price barrier to entry.
Hello?
Econ 101 says that a higher price invites entry. How's it a barrier to entry?!
Quote:
Originally Posted by anantksundaram
Hello?
Econ 101 says that a higher price invites entry. How's it a barrier to entry?!
Hi!
For competitors yes, but not for consumers buying Apple products. I'm saying Apple's advertisements always say "starting at...." if they only have one iPad model that will be one price, it will be higher than the current price of a 16GB iPad while keeping their margins.
Quote:
Originally Posted by drobforever
A $99 tablet is not going to lose money. People are way overestimating the cost of a tablet.
In fact, the biggest cost is just the touchscreen and the glass associated with it. A dual-core CPU is dirt cheap as well as 8GB memory. The cost of such 7" tablet could be as low as $50-60, as long as you strip away most of the ports/buttons, and use some cheap shell. The software is expensive to develop but in this case, it's 'free-riding' the software for other devices.
'cheap shell'
'strip away ports'
'8gb'
'dual core (in a quad core world)'
You make me all itchy in anticipation. Oh, and given your list, I'm assuming that we're not buying a battery life either ('thinner' will require a higher quality battery and/or some custombattery configuration).
You forget R&D, manufacturing costs, shipping, returns (defects or just dissatisfied users), marketing, retail costs (bodies at the cash register and the minimum margin the big box stores want). I'm assuming at the moment (for the next 18 months, until Moore's Law kicks in), the base cost of the device likely around $150-$200 including all of those elements, to 'break even.' And the last I saw, Google is not a 'not for profit' company.
http://www.maclife.com/article/reviews/google_nexus_7_review
$99 to get a device to collect and track all your usage behaviour and help data mining? NO Thanks!
Originally Posted by Shidell
A $99 Nexus tablet will fly off the shelves.
Into trash cans everywhere!
Wait until google gives away their nexus 7 with $99 on top. 2014?
This is a dangerous game for Google! Apple is running from anything Google because they decided to play in the hardware space, other manufacturers will follow suit if Google continues to undercut them. It won't be just Maps either... search, mail, OS, etc. That will hurt in the long run!