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Tablets Scramble to Drop Their Prices for the Holiday Rush.

November 28, 2011 2 comments

Thank you Amazon Fire!  Amazon sent the Android tablet market into a frenzy last week when they launched the Amazon Kindle Fire, an Android tablet customized for a seamless Amazon experience, for a whopping $199.

…and $199 is retail by the way, not just a black Friday gimmick.

In just over a week, Amazon has changed the game of Android Tablets.  Here are some examples of how the Android market is trying to keep up with Amazon’s pricing brevity:

  Barnes & Nobel dropped the Nook Color (the traditional rival of anything “Kindle”) from $249 to $198   and launched the Nook Tablet, a remarkably similar device with additional memory, priced at $249. 

Walmart dropped their already inexpensive Vizio 8″ tablet from $250 to $198.

Latest to jump on board is the BlackBerry Playbook made by RIM.  This fledgeling tablet has been given new life by a lower price point.  For a limited time the price is being dropped from $499 to $199, just to compete with the falling price brought on by the Kindle Fire.    This tactic is working as well.  A Best Buy representative said that the Playbook is selling out across the country.    

              

Why Would Amazon do This?

Amazon took the lesson from the HP Touchpad firesale earlier this year.  The computer giant, HP, liquidated all Touchpads and discontinued the product.  HP slashed the price from $399 to $99, and perhaps influenced the direction of Android tablets forever.  Touchpads sold out immediately, an android port (CyanogenMod 7 Alpha) was developed to replace the lack-luster windows-based OS , and the Touchpads had an immediate underground following.  As a matter of fact, the upcoming Android upgrade, entitled Ice Cream Sandwich, will increase the usefulness of the Touchpad.  Incidentally, the HP’s now discontinued Touchpad was the biggest selling Android tablet of 2011.

So, the lesson in all of this?  Field of Dreams says it all.  If you build it [and sell it for the right price] people will come.  The $200 line has been crossed and the Android world is reeling to figure out new price points.  People will buy a cheap 7″ with limited bells and whistles over a fancier 10″ tablet that is triple the price.

The next year in the world of the Android operating system will be an education to watch.  Perhaps we will see a redefining split between competing middle-class and business-class Android tablets.  Perhaps we will see the industry push the price back up and take the hit in customers.  Perhaps, on the other hand, Android will be able to do what Apple cannot…hold their prices lower than the competition.

Again, thank you Amazon Fire!  The sky is falling.  You have changed the  tablet pricing rules.  The race for consumers is on and this consumer will be actively looking on to see who comes out first!