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Can Android Tablets Match iPad Pricing? Too early to tell.

The success of the iPad has caused an onslaught of new tablets to be announced. There were over 100 tablets announced at CES in January. The big question is whether or not these tablets can compete with the iPad.

Aside from questions about whether or not these tablets can provide an experience comparable to the iPad, there remain questions about whether or not they can compete on price.

Wired is the latest to take up this question with an article called Why Nobody Can Match the iPad’s Price. The article uses the recently announced pricing of the Motorola Xoom tablet to make its point:

Motorola’s Xoom tablet is debuting in the United States with an $800 price tag. (To be fair, the most comparable iPad is $730 — but there’s no $500 Xoom planned, and the lack of a low-end entry point will hurt Motorola.)

There are two Xoom models. Here is how they currently compare to the iPad based simply on high-level specs:

  • 3G, 32GB unsubsidized Xoom for $799
  • 3G, 32GB unsubsidized iPad for $729
  • WiFi, 32GB unsubsidized Xoom for $600
  • WiFi, 32GB unsubsidized iPad for $599

The Xoom does not offer a $500 16GB alternative like the iPad does, but the pricing for their 32GB version is essentially the same as the iPad. It is not yet known when the WiFi only version will be available.

Reminder about Average Selling Price

In my previous post on average selling price, I pointed out how the prices that most companies launch their products at are not usually the long term price. Only Apple continues to sell its product at the same price until a new model replaces it.

This is what makes evaluating products like the Xoom so difficult at this point in time. What we know right now is the manufacturer’s suggested retail price. We don’t know what the real price of the product will end up being the market.

The Droid X went from $200 at launch to a penny four months later. It is very likely that the price of the Xoom will go down in the coming months.

The launch price will prevent the product from being a huge success on day one, but no one other than Apple has huge launch days anyways.

The question will be whether or not the decreases in the price over time and the other features of the Xoom will be able to compete with the iPad and the upcoming iPad 2.

Can Android Tablets Match the iPad’s Price?

I don’t know. Digitimes reported that Apple had secured 60% of global touch screen capacity. If true, it will be hard for competitors to get displays at reasonable prices.

There are other factors as well that may make it challenging. If the tablet market remains unsubsidized, not only will the tablet makers be unable to take advantage of subsidies to lower price, but they will lose the marketing push and distribution arm of the carriers.

But whether or not Android tablets will be able to compete on price can’t be told by their announced launch prices—especially launch prices as close as the Xoom is to iPad prices—because these prices will eventually be discounted off the MSRP in the coming months.

Apple certainly has the lead and may be able to fend off the numerous competitors, but it is too early to tell.