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Forget the Apple Tax, how about an Android Discount?

A number of new reports have come out that document how the iPad/iPad 2 have dominated the tablet market to this point (various statistics put it at Android-based tablets selling about one million compared to Apple’s 28 million iPads sold).  A slew of new Android-based tablets have been released from vendors such as Acer, Asus, and the one that has created the newest buzz, the Samsung Galaxy 10.1.  However, almost all of them have been released at the same price point as the iPad 2.  In Marketing 101, when you have achieved functional parity with a competitor who dominates the market, how do you begin to chip away at their marketshare?  You follow the Walmart solution and compete through lower pricing.
At price parity, why wouldn’t the average user chose a more stable, well-crafted device with a market-leading number of native applications for almost every possible situation (other than Flash) which is the iPad 2?  While the Android tablets may appeal to a niche group that desire a more configurable and open tablet, that is not the majority and for that majority, there’s not a lot of reason to purchase a tablet that is less established at the same price point.  The Android tablet vendors will need to give a reason to the price-conscience consumer purchasing their first tablet or the bottom-dollar CFO looking at rolling out a tablet-based native application to hundreds of their field-force staff.  An Android discount may be the solution to lagging sales.

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Perry Hoekstra

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