Published in AI

$199 tablet is the way to go

by on03 October 2011

Vision coming true
During the period when Apple was shipping iPads starting at $499 / €479 and Google was working hard on Honeycomb Android 3.0, we were wondering pricing of future tablets.

By late 2010 and early 2011 we had a chance to check out a few tablets based on new dual core CPUs, including Tegra 2, TI Omap. We again raised a question about pricing, telling all our industry partners that they have to endow their tablets with iPad-like quality but get them out at significantly lower prices.

In one of these conversations, I expressed my vision of the tablet market in a few years where I said that once they drop to $199, I will have at least three of them mounted on my apartment walls. One of them would end up on the kitchen wall, one in the bathroom, one in the living room and one can’t forget the bedroom tablet. The idea is that you pick a tablet that’s near you and do some basic web browsing or simple gaming. This was my vision in late 2010, early 2011.

It looks like I was not far off as with Kindle Fire, we almost got to that point. Kindle Fire can offer Amazon market, has a bunch of nice content, can play movies, open an ebook and get you to your favourite web page. This is pretty much everything that most of us need.

Early in 2011 we had a chance to play with Barns and Noble Nook, and this $250 + tax device was a step in right direction, but without hacking it, you could not have any Android Market apps on it. This was the only wrong thing about it.

This gets us to Motorola Xoom, which launched at $799 for its 3G version with Verison. This money can buy four Kindle Fire tablets, something that I need to fulfill the digital home dream. I still don’t know if anyone is planning to make some wall docking stations that can charge these four $199 tablets placed on walls, but there should be a way to make something, if you are not afraid to play with some tools.

Now people in Europe are facing two major problems. First one is that Kindle Fire is unlikely to ship in this year to the old continent and the second one is that $199 will probably jump to more than €199 ($265.6 with today’s exchange rate) which gets you to a slightly higher cost than what US customers end up paying.

The catch is that $199 shipped from Amazon (etail) stays at this price. If you buy this device in California Best Buy you have to pay an average of 9 percent sales tax and the same device in retail ends up at roughly $217. In Europe the VAT (Value Added Tax. Mehrwertsteuer ger.) is always included in the final price, no matter if you are buying from etail or retail. This tax varies from country to country and it averages at 20 percent. Well, we guess someone has to pay for social/medical insurance and all these bailouts after all.

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