Sony Tablets Long on Creativity, Short on Competitive Pricing
Sony (NYSE:SNE) formally unveiled two Google (NYSE:GOOG) Android "Honeycomb" tablets, and while the device maker bet big on bold new designs for tablets, it fell short on aggressive pricing.
Based on the Android 3.1 "Honeycomb" build, the Sony Tablet S has a 9.4-inch display and is powered by a Nvidia Tegra 1 processor. Far from an ordinary rubber metal or plastic encased tablet, the Tablet S resembles a folded magazine-style design. The idea is to offer balance to the weight in users' hands.
Users may access the S to control their whole home entertainment system and access music and movies from the cloud. The slate comes preloaded with access to Sony Entertainment Network, with six months of free access to its Music Unlimited service, plus two free PlayStation 1 games.
The Tablet P shares much in common with its S sister, including the Tegra 2, front-and-rear cameras, and WiFi and LTE availability on AT&T. However, the P features two 5.5-inch screens that fold, and it weighs only 0.83 pounds. While Sony said the P would launch with Android 3.2 later this fall, it has not unveiled pricing.
But if the Sony Tablet S cost is any indication, it might be a moot point.
Sony priced the the 16GB Tablet S at $499, $599 for the 32 GB model. That's the same price point as the market-defining Apple iPad consumers have come to know and trust in the last 18 months, said Forrester Research analyst Sarah Rotman Epps. That's not going to cut it, Epps said in a blog post Aug. 31.
"We've been down this road before: Motorola and HP both priced their devices on par with the iPad, and both were unable to sell their devices in volume until they lowered the price significantly," Epps wrote.
While Sony told Epps the Tablet S's feature functionality justifies a premium price, Epps reiterated that new Honeycomb tablet comers should seek to offer the leanest pricing possible to make inroads in the market versus tablets not made by Apple.
Sony should worry not about the iPad but about Amazon's Honeycomb tablet, which the entire industry now expects to be significantly cheaper when the e-commerce giant launches it this fall. Epps believes an Amazon Honeycomb tablet will launch this fall for under $300, selling 3 million to 5 million units in the fourth quarter.
Moreover, she admonished Sony because it should know better.
"Product strategists at Sony, of all companies, should be the most wizened to the harsh realities of competing with Amazon economics from its experience with its eBook reader business," she wrote. "Sony was the first to launch a widely available E Ink eReader in 2006, only to rapidly lose market share to Amazon, whose Kindle included wireless connectivity and severely undercut Sony on price."
She suggested that while Sony's hardware and content might present an attractive offering for consumers, the company should have led with content and services.
That is how Epps and other analysts expect Amazon will approach the tablet market--by pairing the hardware with an Android application store, Amazon Instant Video and MP3 downloads backed by Amazon's Cloud Player storage service.