7 inch android tablet heats up as HP, Amazon cut prices.com
7 inch android tablet prices are plunging amid a flood of new devices and cutthroat competition for market share.Amazon has slashed prices of its Kindle HD tablets to as low as $169 in the US and 139 pounds in Britain, while Barnes & Noble has cut the price of its Nook to as low as $129, and has announced plans to outsource production of its tablets.
"Since Hewlett-Packard launched its tablet, there has been a lot of pressure on prices," said Rob Enderle, analyst with Enderle Group.HP sells its Android-powered seven-inch Slate for as low as $139, helping make the paperback-size tablet computer an affordable commodity.A Gartner survey suggests tablet sales globally will rise 67.9% to 202 million units this year, but analysts say the market is cooling after a couple of years of sizzling growth.
Gartner said the red-hot growth in tablets and smartphones will taper off as these devices gain longer life cycles. The report said many consumers are opting for "basic" tablets to cut costs."It looks like the market may be tiring of tablets and as makers get desperate, you may see more pressure on prices," Enderle said.
Some retailers are selling tablets for less than $100, but Enderle said the flood of poor-quality devices may eventually backfire and turn off consumers.Jitesh Ubrani, analyst at the research firm IDC, said many of the low-cost tablets come from small, sometimes unbranded "whitebox" vendors."The decline of the PC market makes it increasingly important for PC vendors to compete in the tablet space," Ubrani saidEven so, the analyst said, average prices for tablets is likely to drop further, and that tablet shipments are expected to overtake all PC shipments in 2015."dfg343WEW
The market leader, Apple, has so far kept above the fray, keeping prices steady on its iPad line of tablets, although it introduced the lower-cost iPad mini last year at $329, less than the $500 for its full-size iPad.Orr said some of the manufacturers may be forced out of the market if tablets are not part of their "core" business.
Enderle noted that Google, which makes a $199 Nexus 7 tablet, "has a subsidized model in which advertising makes up the difference" of any lost profits from the device itself.But he noted that Barnes & Noble faces an unusual predicament because it is primarily a brick-and-mortar bookseller, and needs to bring customers into its physical stores.
"Every Nook 8 inch android tablet sold causes them to lose a customer who might also go into the store," he said. "They may need to go fully online and compete with Amazon."IDC's Ubrani said it may be difficult for players like Barnes & Noble to compete with Amazon by subsidizing the tablets."Not every tablet vendor can afford to utilize this business model," he said. "Yes, each can offer movies, music, apps, etc to help subsidize the tablet, but none have the same scale and product selection that Amazon does."Enderle said that even though it seems to be a good time to buy a tablet, he advises people to wait. "We are just short of a refresh" for many tablet makers, said Enderle. He expects new versions of the iPad, Surface and several Android models. Amazon is also reportedly working on new tablets."We will see a raft of new products in August and September," he said. "Unless you find a really good buy. I would wait."