The future of the $200 tablet

You'll soon be able to get a lot more value for a lot less money.

By , Computerworld |  Personal Tech

While Google representatives won't comment on rumors and speculation, the evidence is certainly starting to stack up. A quick search of the Internet turns up no shortage of purported leaks and insider winks. Sources close to the situation with whom I've spoken have discussed the project with a similar level of certainty, pointing to this June's Google I/O developers' conference as the time when the details -- and perhaps the product itself -- will be unveiled.

In a recent interview with The New York Times, Nvidia's Huang strongly hinted that an Android tablet running his company's Tegra 3 processor would debut this summer for a cost of $199. "We took out $150 in build materials, things like expensive memory," Huang is quoted as saying. "At $199, you can just about buy a tablet at a 7-Eleven."

The budget tablet strategy

So how are prices on such seemingly high-quality devices suddenly plummeting so low? While Nvidia points to falling component costs, some analysts suspect there's more at play.

"Companies just aren't making much of a profit off of these tablets," says Rhoda Alexander, director of tablet and monitor research for market research firm IHS iSuppli.

Alexander notes the success of Amazon's $200 Kindle Fire tablet, which -- while relatively limited in both performance and capability -- has sold exceedingly well. For Amazon, Alexander says, it isn't about making money off the hardware itself; it's about making it easy for customers to spend money with the company every day.

"Where they're making the profit is in the long term of bringing people into the Amazon universe," Alexander says.

Amazon's strategy is clearly winning people over: The company accounted for more than half of all global tablet sales in the fourth quarter of 2011, according to IHS iSuppli's estimates, shipping 3.9 million Kindle Fires and shooting past Samsung to become the world's second-largest tablet shipper for that quarter.


Originally published on Computerworld |  Click here to read the original story.
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