Unbeatable: Why the iPad wannabes can’t come close to iPad’s price

“The new iPad model hitting stores Friday comes with several improvements over the original version but the same price tag, hobbling efforts by rivals at breaking Apple Inc.’s hold on the emerging market for tablet computers,” Peter Svensson reports for The Associated Press.

“Competitors such as Motorola Mobility Holdings Inc. can’t seem to match the iPad’s starting price of $499. Tablets that are comparable to the iPad in features cost hundreds of dollars more, while cheaper tablets are inferior to the iPad in quality,” Svensson reports. “It’s rare for prices to start low and stay low, yet it looks as if that’s exactly what Apple intended. Apple appears to have chosen, right from the start, to make less of a profit from its iPads than it does from iPods and iPhones. Apple is telling investors to expect overall margins to keep declining, meaning competitors can’t expect much of a reprieve.”

Svensson reports, “Rivals generally use Google Inc.’s Android system, which Lam says demands more memory, raising the cost of the product. Apple’s iPad software isn’t as ambitious about ‘multitasking,’ or the ability to run more than one application at the same time, so it doesn’t need as much memory”

MacDailyNews Note: iPad multi-tasks intelligently, with regard for the user and, importantly, their device’s battery (se also: Adobe’s antiquated Flash or lack thereof). All iPads can run more than on application at a time.

Svensson continues, “In short, using Android forces iPad competitors to produce more expensive machines, Wayne Lam at research firm IHS iSuppli said. They might be able to bring component costs down by working closely with Google to optimize the software, but meeting the needs of a range of devices and companies is difficult. Because Apple controls its own software, it’s a better position to tailor it to its own devices. That adds up to very difficult math for competitors.”

Read more in the full article here.

[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]


  1. “…working closely with Google to optimize the software…”

    That’s just funny. I wonder when Yahoo’s gonna come out with an operating system? Maybe Ask should, too.

    Google’s good at search. They should stick to it.

    1. “Google’s good at search. They should stick to it”

      That’s why, to stick to search, they booted Mr Eric Mole Schmidt.

      Now let’s see what the new Google CEO does moving forward.

  2. “Apple’s iPad software isn’t as ambitious about ‘multitasking,’ or the ability to run more than one application at the same time, so it doesn’t need as much memory.”

    This guy is an idiot. People who write about technology should at least have some clue about it.

    1. It’s nice to get paid as an idiot journalist! I guess that’s the norm theses days.

      JOB OFFER: If your a journalist that can’t do proper reaearch before writing your piece, your hired!!!

    2. I have never understood this fixation on multi-tasking on mobile devices. You simply don’t use mobile devices like you use a laptop or desktop computer, and most of the apps are far simpler anyway. How can I interact with another app when I have a different one on the screen and it’s a touch interface? So Apple puts the other apps in “standby” mode, ready to resume when you switch to it. Simple and works great. I don’t need Safari continuously updating web pages or animated GIFs when I’m reading my mail or playing Angry Birds.

  3. Why are all these so called journalists whining about how the others can’t steal and copy Apple at the dame price?

    Imagine they would all have to do their own R&D for years. Their pads would cost 3 times as much as an iPad.

  4. so you mean the analysts are finally getting it?

    No duh, mac users have known for you years you can more power from less if the software is optimized for the specifications of the machine.

    Windows, and now google’s support of all things hardware is only going to bog down the OS when it could be optimized. The only way this would happen if a company put all their eggs into one device and tooled the OS for many years.

    This is why Google’s OS will always need the greatest specs to perform as well as an iPad with modest specifications.

    The fact that analysts are finally coming round to this idealism that Apple has always done, is kind of an insult of common sense.

  5. He misses half of why apple is taking less profit from the actual device. Apple has it all to help control it’s prices for all iOS devices. They have a store that all the devices use called iTunes. This makes the decision to lower profit expectations for a product that mich easier. If Macs had the same successful store that could justify get more products in more hands apple would lower the cost of a the Mac line. Just wait for the new Mac app store to take off and watch prices on the low end come down within a few years.

  6. Speaking about about aggressive multitasking, for various reasons, I am currently stuck with an Android phone. One absolutely required app is a task killer, set at aggressive, to play Whack-A-Mole with all the tasks that keep awakening and using up memory. POS

  7. “Apple appears to have chosen, right from the start, to make less of a profit from its iPads than it does from iPods and iPhones.”

    Less is a relative term. Apple’s profits are massive, and even its lowest margin products are likely the envy of the rest of the consumer electronics industry. Less is far better than little to none, which appears to be the profit margin for the rest of the industry.

    “Apple is telling investors to expect overall margins to keep declining…”

    I have not seen anything from Apple indicating that margins will decline indefinitely. I think that this statement is misleading.

    Apple’s current profit margins are very strong. So a modest reduction should not be a major source of concern. Overall profits will likely be increased by this approach. Competitive pricing will help Apple to maintain market dominance and strong unit sales, providing economies of scale and financing R&D for subsequent generations of products.

  8. “Apple appears to have chosen, right from the start, to make less of a profit from its iPads than it does from iPods and iPhones. Apple is telling investors to expect overall margins to keep declining, meaning competitors can’t expect much of a reprieve.”

    I am an Apple investor and I did not get the letter stating that margins are going to start declining significantly as the iPad becomes a bigger part of the business. Actually, I expect the iPad to deliver pretty much the same margins as the iPod and other Apple products. Maybe slightly lower, but now much, and certainly not a continuing decline. I expect Apple to use its incredible market power to do commodity purchases at levels that give it a huge pricing advantage.

  9. I just don’t understand why some plucky 3rd-tier manufacturer CEO isn’t hopping up and down proclaiming how his company is going to bring the fight to Apple with their new XJK-5198 Spinorama Tablet. 😀

  10. If you’re running one of the wannabe companies, wouldn’t you have learned something from iPod and iPhone history? While they’re striving to catch up with Apple’s current model, the next leapfrog version is being readied for release and the next two after that are already under development. This pattern is even more pronounced with Apple having a unique proprietary chip. Until the wannabes can get closer and/or cheaper, they are doomed to fail, and each new Apple version just makes that more impossible.

  11. Unlike all the other makers, Apple can offer their iPads as a bit of a loss leader because they have income from iTunes and benefit from the sale of complimentary auxiliary devices (Apple TV, Macs, iPhones, MobilieMe). Their massive sales figures also allow them to firm up electronic suppliers at a lower price point. Few other manufacturers can glean profit from anything but the device itself: Motorola gets nothing from the Android Market apps, the sale of Windows PCs, Xbox, etc. Nor does Samsung or anyone else. Segmented providers means segmented profits, which ads up to extra money on white collar infrastructure at every level; in short, extra costs. Until someone copies Apple’s entire process of controlling every aspect, while creating a whole ecosystem, Apple will continue to run away with this market. MicroSoft is the only company that could, but to do so would be to break its allegiance to existing manufacturers. Such a move would threaten their dominance in enterprise where the lowest buck rules. It’s something they won’t do until long after they begin to take on water. By then it will be too late.

  12. I’m so sick of the multi-tasking naysayers. Listen. Are you ready? Are you listening?

    Just like what happened in the desktop space with multi-tasking operating systems making people more productive, so too will this happened in the tablet space.

    It’s simple. Multi-tasking makes people more productive. And tablets are being used, more and more, for production work, like crafting spreadsheets, editing video, creating music, and so forth. They are and will continue to supplant desktops and laptops for several tasks.

    I agree with Jobs. Traditional PCs are going to be like trucks. We’ll still need them for heavy lifting, but that’s it.

    If you don’t understand just how much iOS sucks at multi-tasking, and just how much better say webOS with its cards is, that’s cool.

    But the world will go on, no matter how much you cling to this idea that multi-tasking is a bad idea on a tablet. As soon as Apple comes out with a true multi-tasking based iOS, you’ll all be in awww of it, saying how cool it is. So stop drinking the koolaid. Yes, right now, it’s good for battery life. But it’s at the expense of usability.

    webOS, what’s up?

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