Price Leadership

“Price leadership means nothing in the tablet space.” according to Don Reisinger at ChannelInsider. He’s discussing defects in the selling of tablet computers by HP and Dell compared to Apple. He has a point. For early adopters there may well be other considerations more important than price but as the market for tablets matures that will likely change.

Increasing mobility–>
desktop PC notebook netbook tablet smart phone

There are advantages to increased mobility for which folks pay a premium but only temporarily. I remember when notebooks were $1400 and a desktop PC cost only $1000. Folks who pay $700 for the latest mobile gadget which gives less performance than a typical desktop are paying a premium of hundreds of dollars and they will do that as long as it seems advantageous. There is no reason to believe that a netbook which is easier to use and not much less portable than a tablet is worth hundreds of dollars less. As the price of smart phones comes down and the performance of netbooks increases, the tablet will be squeezed. Price leadership will matter sooner or later. Dell and HP can wait out Apple’s surge. Just this month several tablets with quite useful performance with Android 2.1 have been put on the market for less than $200. HP and Dell do not need to give price leadership. Others (e.g. Kmart) will do that. By Christmas time there will be lots of price competition and Apple will decline in share of this market.

Dell, HP, and Apple can continue to sell what their customers want. Emerging markets looking for small cheap computers will buy from whomever supplies the product.

About Robert Pogson

I am a retired teacher in Canada. I taught in the subject areas where I have worked for almost forty years: maths, physics, chemistry and computers. I love hunting, fishing, picking berries and mushrooms, too.
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