So Far, Rivals Can’t Beat iPad’s Price

So Far, Rivals Can’t Beat iPad’s Price:

Analysts and industry experts point to a number of reasons. Primarily, they say, Apple’s deep pockets — a staggering $60 billion in cash reserves — have allowed it to form strategic partnerships with other companies to buy large supplies of components, for example, in expensive flash memory. By doing this, the company probably secures a lower price from suppliers, ensuring a lower manufacturing cost.


At the same time, they say, Apple has sidestepped high licensing fees for other items it needs, like the A4 and A5 processors within the iPads. Those parts, designed in-house at Apple by a company that Apple bought, are among the costlier components needed to make a tablet computer.

Mr. Sacconaghi said Apple also could subsidize some of the cost of building iPads with the money it makes through its App Store, which generates more than a billion dollars each year. This means that Apple can take a lower profit margin on the iPad, 25 percent, than it does on, for example, the iPhone, which can yield as much as 50 percent profit.

Yet another advantage is Apple’s wide net of its own global retail shops and online stores; for customers, this means they can avoid a markup from a third party like Best Buy.

Although other companies have some of these factors in their favor, no one but Apple has all of them.


(Via Business and Financial News – The New York Times.)

Add the fact that the hardware and iOS is implemented well, delivering the Apple “experience,” and you have a tough competitor.  It’s not that HP and Samsung can’t compete. It’s just that they have to make different design decisions than they’ve been making to date.  And given the constraints they are under, they have their work cut out for them.

Verizon to sell Galaxy Tab starting November 11th for $599.99 — Engadget

Verizon to sell Galaxy Tab starting November 11th for $599.99 — Engadget:

“Well, we finally have a price on this thing! America’s largest carrier has announced plans to sell Samsung’s Galaxy Tab for… $599.99. The 3G, Android 2.2-based unit (which will be loaded with V CAST apps, of course) will hit retail on November 11th, and since it’s being sold at full price, a data plan (which starts at $20 per month for 1GB) is completely optional.”

(Via The Macalope.)

I thought I’d never write the following words: Apple is killing Samsung on price.