Hewlett-Packard may set the price of its upcoming tablet PC in order to undercut the price of the Apple iPad, according to new reports, heralding a price war among manufacturers looking to gain an early advantage in the burgeoning tablet PC segment. Analyst comments and a virtual teardown of the iPad indicate that Apple has some wiggle room if it wants to position the iPad's price more competitively after the device's release within the next two months. HP's tablet was originally unveiled by Microsoft CEO Steve Ballmer at this year's Consumer Electronics Show in Las Vegas.
Hewlett-Packard may adjust the price of its upcoming tablet PC in order
to better compete against the Apple iPad, according to a new report in The Wall
Street Journal, as a recent wave of manufacturer announcements indicates that a
price war may be brewing in the tablet space.
According to the
Feb. 18 report in The Wall Street Journal
, HP executives are slated to lock
down details of their tablet PC, which was unveiled by Microsoft CEO
Steve Ballmer during a keynote presentation at January's Consumer Electronics
Show in Las Vegas. One of the
items on their agenda, apparently, is to decide on how to best undercut the
iPad's price point. Reports suggest that the HP device will run Windows 7,
which includes touch-screen capabilities.
HP itself has been tight-lipped about specs for the device, which the
Journal refers to as "the Slate." During
the presentation at CES
, Ballmer suggested that the tablet's capabilities
would include e-reading, Web surfing and the ability to play
"entertainment on the go," such as movies.
In addition to that HP device, Ballmer also brought tablets from Pegatron
and Archos onto the stage with him; however, he declined to demonstrate the
capabilities of either of the latter two. Other
tablet PCs at CES
included the Fujitsu Lifebook T4410, which converted from
a traditional notebook to a multi-touch tablet thanks to a sliding screen, and
Lenovo's IdeaPad U1 hybrid notebook, which features an 11.6-inch screen that
detaches to become a tablet running a Skylight Linux-based operating system.
A number of manufacturers at CES declined to name definite price points
for their upcoming tablet products, presumably waiting to see how the market
developed throughout 2010 before finalizing those numbers.
At the same time, some
e-reader manufacturers are positioning their products to compete more robustly
in the tablet PC environment
, as evidenced by Amazon.com's announcement of
an SDK (software development kit) for the Kindle that would allow developers to
create applications that leverage the device's wireless delivery and e-ink
display. Amazon and Barnes & Noble have both introduced applications that
port an e-reader interface onto other devices, such as the BlackBerry.
Throw into the mix smaller manufacturers like Fusion Garage, whose
controversial JooJoo tablet PC entered full production on Feb. 3
, and the
possibility for a substantial price war exists within the tablet PC space,
previously a niche industry.
Apple executives allegedly indicated to Credit
Suisse analyst Bill Shope that they intend to be "nimble" with the
if customers decline to buy the device in mass numbers during
its initial rollout within the next two months. That also gives Apple room to
adjust the iPad's retail sticker if a price war erupts in the tablet PC space.
While the iPad's price is lower than that of many Apple products, particularly
its traditional PC line, analysts such as IDC's
Susan Kevorkian see its cost as a potential disadvantage, particularly in the
For the moment, though, Apple plans on retailing the 16GB version of the
iPad for $499 with WiFi, and $629 with WiFi and 3G. The 32GB version has a
price point of $599 with WiFi, and $729 with WiFi and 3G. At the top of the
tier, the 64GB version will cost $699 with WiFi, and $829 with WiFi and 3G. Research
firm iSuppli conducted a "virtual teardown" of the iPad earlier in
and theorized that Apple can expect a fairly substantial profit
off the iPad, with the $829 version of the device costing $346.15 to build.
That profit may decline, however, if Apple lowers the iPad's price point to
compete with offerings from other companies.