Can Rivals Force Apple iPad Price Drop?

Upcoming Microsoft, Google and Hewlett-Packard tablets might be too little competition, too late, analysts say. But consumers stand to benefit from competition driving down prices.

Tue, April 13, 2010

CIO — Some half a million consumers bought Apple's (AAPL) iPad in the first week, signaling the start of the great tablet computing race. Among the big-name participants, Google (GOOG), Microsoft (MSFT) and Hewlett-Packard (HPQ) all plan to deliver tablet offerings later this year.

But it won't be easy catching the iPad given Apple's months-long head start, say analysts. It also doesn't help that tablet makers are falling into an age-old hardware trap. "Most of the devices in the market are competing with the iPad based on hardware features," says Gartner (IT) analyst Van Baker, "and hardware is a minimal part of the equation."

On the upside for consumers, more tablet choices should mean more affordable prices. "The biggest threat to the iPad is likely the price of the thing, which places it above most buyer's budgets," says analyst Rob Enderle of the Enderle Group. "However, the Google and Microsoft entries help validate the class of device, will eventually force more affordable prices, and should help these things replace much of the printing we do today."

Here are some of the upcoming iPad alternatives: The Hewlett-Packard Slate running Windows 7 is expected to hit the market this summer, as well as the Dell (DELL) Streak running Google's Android OS and Lenovo's IdeaPad U1. The latter runs Windows 7 but changes to widget-style Linux when popped out of its docking station. Then there's Microsoft's Courier with dual touchscreens, expected sometime in the second half this year.

For a complete listing, check out the slideshow Slate Wars: 15 Tablets That Could Rival Apple's iPad. The biggest names in the rival group are Microsoft and Google.

Google had taken its sweet time coming out with a product to contend with the iPhone. The Motorola (MOT) Droid running Android OS came out more than two years after the iPhone, followed by the Nexus One. Google tried to have near complete ownership of the device a la Apple with the Nexus One, but sales are reportedly sputtering.

Not wanting to be embarrassed by Apple in the emerging tablet market, OEMs pushed Google to provide support for larger devices, says Enderle, who is currently testing the Dell Streak in beta. "Google has been more of hindrance than a help until recently."

And the OEMs are doing as much as they can to differentiate themselves. "Both Google and Microsoft are using this as a platform play," says Enderle. "For them, the OEMs that build the hardware will have to complete the experience."

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