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iPad 2 Forces Samsung To Reevaluate Galaxy Tab
An anonymous reader writes "Apple's iPad competitors are still spec-obsessed, and Apple's next-gen iPad coupled with the same price point is forcing Samsung to rethink its tablet strategy and pricing methodology altogether. The South Korean Yonhap News Agency relays a quote from Lee Don-joo, executive VP of Samsung's mobile division, about Samsung's upcoming Galaxy Tab 10.1 compared to the new iPad. 'We will have to improve the parts that are inadequate,' Don-joo said. 'Apple made it very thin.' Features aside, Samsung also finds itself in a bind price-wise. The upcoming Galaxy Tab model, complete with a 10.1-inch screen and Android 3.0, was initially going to be priced higher than the current 7-inch Galaxy Tab. Apple's iPad 2, however, is forcing Samsung to 'think that over.'"
This is awesome news. Competition is good for us!
but they aren't losing money on the parts.
Instead Apple is using it's massive cash reserves to buy 10 million of each part ahead of time knowing that they CAN sell them.
Samsung is only buying 2-3 million at a time. he who buys 5 times the parts you are is going to get a better price.
i thought once I was found, but it was only a dream.
It is amazing how the conversation changes. I remember a year ago, there was a lot of people dumping on the iPad as overpriced, that they could get a more powerful netbook for hundreds less.
Now today, it is all about how is Apple making them so inexpensive.
Strange...
Its' too little too late. Don't even try to compete on specs, or other bullshit...compete on price and targeted use. Get a $100 capacitive touch screen tablet that is little more than a portable web browser...watch how many you sell. I'll take 3 today. Hell, I'll sell my ipad and buy however many I can with the proceeds.
Yes, it is very easy actually.
1) They have huge quantities of scale. While other manufacturers are making 100's of models, Apple focuses on a few. Easier to get great prices on millions of the same part, then to get prices on thousands of different parts with retooling in between.
2) That huge cash reserve? They are using it to hedge prices. For example they are pre-purchasing key components so that the manufacturer does not have to add in risk costs for unknown future prices. They are also sharing the cost of new manufacturing facilities as part of a contract to get better prices. Hard to compete when you can't buy components because they have bought up half the supply, leaving everyone else to fight over the other half.
3) The entire company is ran very lean, probably the biggest lean manufacturing company in existence. Since all their effort is very focused, they do not have the overhead that most other companies their size have. Check out their R & D spending versus sales. Incredible.
For those that think they are running razor thin margins to get iPad hardware sales to make it up on the back side, you do not know Apple very well. They make healthy margins on everything they do. They have even hinted that they could drop the prices on iPads if they need to and still make a lot of profit. They are a public company, check it their filings.
I do remember thinking that Apple simply had a glorified iPod touch. Then I tried one. Is the device "magical?" No. But it is a game changer, in more ways than people realize yet. I believe Apple has very big plans for this device, and the size of the case is just the tip of the iceberg.
Apple isn't hiding what they are doing. They are being very deliberate and open. In the iPad2 product release Jobs stated that they believe tech and art are not mutually exclusive. Their competitors are still all tech oriented. Even Google and Android is tech oriented. Most of the Apple haters here are still tech oriented and think that the art side just needs some flashy doo-dads and window transparency to come out on top. So it's not surprising to see so many people think that Android will blow the iPad out of the water.
Android tablets will come, but until companies realize that the consumer market really wants computing devices which don't feel like computing devices, they will simply be in a race to the bottom and Apple has already made it clear they aren't interesting in winning the race to the bottom. That said, their competitors need to keep in mind that as Apple's economies of scale get larger they will be pushing the bottom farther down.
It will be very interesting to see how the market responds. Windows on any clone isn't the target anymore. Now it's tight integration between excellent industrial design and user interface. I can't think of any company oriented to even start seriously competing and if Apple continues raising the bar every year like this then they will continue to lead the market space until someone can push the bar higher or until Apple brings a piece of crap to market.
"The avalanch has already started, it is too late for the pebbles to vote." -Kosh