March 4, 2011 | by Michael Heller
I fully understand when people around the iPad 2 announcement make blanket statements that “Android tablets are too expensive”, because I take everything connected to an Apple event through a bias filter. But, when those same comments come from Android sites and in the comments of our stories, I feel like I need to say something: We need to stop the generalization. We can’t use the Xoom as a sample of the entire Android tablet ecosystem. Not all Android tablets are expensive and not all are going to be expensive.
Examining the samples
The Xoom is a bit on the expensive side, there’s no argument on that, but the Xoom isn’t the only tablet on the market and it’s only going to be the lone Honeycomb tablet on the market for less than 3 weeks (if the G-Slate rumors are correct.) For those who want to throw out the blanket statement that “Android tablets are too expensive”, keep this in mind: there are literally dozens of cheap (in every sense of the word) Android tablets on the market. Those tablets have dominated the Android ecosystem until now, but would you rather have devices like the Augen tablet being the headline for Android or the Xoom? There are also a couple pretty nice tablets at very reasonable prices: the Galaxy Tab price is down to $449 off contract, or as low as $249 on contract, the Tegra 2 powered Notion Ink Adam is as low as $500, and the Tegra 2 Viewsonic G Tablet is as low as $350.
Sure, these aren’t Honeycomb tablets, and most don’t even have access to the Android Market, but they are still Android tablets. And, what about those Honeycomb tablets? The LG G-Slate looks like it’s going to clock in at $699 for the 4G version, which likely means a $500-550 price range on a WiFi-only model isn’t out of the question. Sony has announced a $599 10″ tablet for later this year. There are also a number of other tablets without established pricing yet, including the Samsung Galaxy Tab 2, the Galaxy Tab 10.1, the HTC Flyer, and Toshiba tablet, not to mention the myriad tablets from 2nd tier manufacturers which have been announced at CES and MWC. We can’t assume that all of those tablets will copy the Xoom pricing structure. We can’t even assume that the Xoom price will hold once there is more competition, especially given that a day after the iPad 2 announcement Motorola started offering $100 coupons for the Xoom.
Competition is a big determinant of price, and right now the Xoom has no competition. By that, I mean we can’t really consider the iPad as competition right now, because the Xoom is something completely different. People who want the iPad know they want it, the Xoom isn’t even on their radar. Those who know that they specifically want an Android tablet know that there will be more choice very soon. So, the Xoom’s audience right now has a very high proportion of early adopters, developers, and tech fetishists, none of whom are too cost conscious. The Xoom can charge a premium because it is the only option for those who cannot wait 3 more weeks to own a Honeycomb tablet, and for those who want to have Verizon service. Motorola has the luxury to ignore anyone complaining about the price right now, because they can always drop the price once there is more competition in the Honeycomb space and claim it’s because they want to make customers happy.
The other big price determinant, as we saw with the teardown of the Xoom, is the screen. The Xoom screen is big and it is costly. The screen alone accounts for 39% of the component cost of the Xoom. The Xoom as a whole cost $360 just for the components, not counting manufacturing, storage, shipping, marketing, etc. So, it is completely unreasonable right now to expect tablets that cost as little as netbooks. 7″ tablets like the Galaxy Tab 2, HTC Flyer, and the rumored smaller screen Motorola tablets should be able to significantly cut that cost and therefore drive down the cost. But, ultimately, we still have to be careful how we’re comparing, and what exactly we consider expensive.
Comparing Apples to Apples
People love to toss around that $499 number, as if that’s the magic number when it comes to tablets. First of all, why is that the magic number? Because Apple sells a 16 GB tablet with no 3G connectivity, no SD card storage expansion, and no GPS? If that’s what you’re looking for, then you can’t compare that model to the standard Xoom, which not only has all of the things I listed as missing on that model iPad, but it has a better quality front facing camera, LED flash, double the internal storage, a standard USB port (rather than needing Apple proprietary cables,) and a higher resolution screen. And, keep in mind we still don’t know how the RAM compares between the iPad and Xoom. Even if you want to compare the comparable 32 GB 3G iPad the difference is a mere $70, which for all intents and purposes could be considered an “early adopter Honeycomb tax”.
Once the G-Slate hits, you’ll be able to give all of the same extra standard features compared to the iPad, plus 3D video capture and glasses-assisted 3D viewing, all for $30 less than the iPad (assuming price rumors are correct.) Add in more and more Honeycomb tablet competition in the coming months, and the idea of generalizing that Android tablets are expensive gets more and more silly.
The one Honeycomb tablet is more expensive than the comparable iPad, but the next Honeycomb tablet likely be cheaper, and there are a lot more on the way after that. Soon enough there will be various Android tablets to compete with every tier of the iPad. They may not all come from the same manufacturer, but we shouldn’t expect that. It’s not how the Android ecosystem has worked in the past, so why would it change once tablets showed up?
Verizon and Motorola wanted to start off the age of the Honeycomb tablet with a high end device, and they will charge for it. T-Mobile and LG will come in and charge less, because T-Mobile has to be more aggressive in pricing. Samsung will make multiple sizes on multiple carriers and fill in even more of the market. Yes, right this minute the iPad is cheaper than the Xoom, but it also doesn’t have all the standard features. If you don’t want those standard features, that’s fine. I don’t want all the bells and whistles either, that’s why I’m waiting on an Android tablet. But, that doesn’t mean that we can generalize that all Android tablets are expensive. Let’s all try to keep some perspective here.