Flood of low-cost tablets expected in $200 to $300 range

Computerworld - Analysts are predicting that a flood of $200 to $300 tablet computers will hit the market this fall, prompting the essential question: Which device will come out on top?

Several analysts are betting on Amazon.com to be at the top of the heap with an expected $299 Android-based tablet that is likely to be introduced sometime in October.

But its price tag -- which is $200 below the $499 starting price of the market-leading iPad 2 -- is only part of the reason why the 9-in. tablet is expected to do well. Analysts also expect the device to enjoy strong sales because they expect Amazon to offer content that approximates or even exceeds the content that Apple offers for the iPad. Amazon will make money on the content it sells, and that revenue is expected to more than make up for any loss it incurs in selling the tablet at a price below the cost of making it.

"Amazon has an ecosystem like Apple, with its own app store that offers music, movies and videos, and a bookstore," said Bob O'Donnell, an analyst at IDC. "Not only would you get a cheaper device [than the iPad], you would get the integrated Amazon experience. That's what makes Amazon's tablet the most interesting -- and it's where other [Android] tablets will be challenged."

In effect, Amazon's approach will be to entice buyers with a much lower price but offer "all the services of Apple," O'Donnell said.

Other Android tablets that will likely compete with Amazon's device include the $199 Lenovo IdeaPad A1. Announced Thursday, the IdeaPad A1 is the cheapest 7-in. Android tablet from a top device maker. Another contender is the original Samsung Galaxy Tab. Now available on Amazon for $279.99, the Galaxy Tab sold for $600 when it first appeared late in 2010.

That original Galaxy Tab is being replaced by the Galaxy Tab 7.7, which Samsung announced Thursday at the IFA conference in Germany. The Galaxy Tab 7.7 includes a Super AMOLED Plus display. Pricing in the U.S. hasn't been set, but the new device is expected to cost less than $800 without subsidies, according to Samsung officials in Sweden.

Analysts wondered what the price will be for the new, thin Toshiba AT200, which was also announced at IFA on Thursday. It has the advantage of shipping with Android Honeycomb, the tablet-optimized version of Google's operating system, while Lenovo's device runs the older Gingerbread version.

The price of the Hewlett-Packard TouchPad dropped to $99 after HP said recently that it planned to stop selling the device. But the company this week said it would make a final round of the machines because the low price sparked a sudden uptick in consumer interest. The TouchPad markdown was further evidence of the importance of low prices to buyers, analysts noted.

O'Donnell and other analysts said Samsung and most of the major tablet makers will likely bring prices down by the end of the year in order to compete.

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