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

At that cost, which tablet will win out? Analysts say, watch for Amazon.com's upcoming device

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Meanwhile, Apple isn't likely to drop the prices of its iPad 2 models very much, if at all, in the next few months, according to O'Donnell and Jack Gold, an analyst at J.Gold Associates.

IDC recently said the iPad and the iPad 2 together held a 68% share of the tablet market in the second quarter. Apple is likely to roughly maintain that market share over the next two years, even though its products cost more than competing devices. That's partly due to the fact that the iPad was first to market. But the more important factor is that "the iPad is considered a better device with a nice experience. And, for buyers, the $499 starting price is low enough to give it a try," O'Donnell said. "Until now, there hasn't been enough of a price gap to find something else."

Gold said the iPad will keep its higher price for a long while, just because "it is regarded as the BMW or Lexus of tablets, while Lenovo historically tends to be more of a Chevrolet."

Keeping to his car metaphor, Gold said that at $199, a Lenovo ThinkPad A1 tablet could be perceived by buyers as something of lower quality. "Perhaps a Hyundai?" he mused.

With tablet prices between $200 and $300, "that opens opportunities for buyers," O'Donnell said.

The Lenovo device's $199 price tag is especially interesting because Lenovo is considered an established manufacturer, analysts said. Some lesser-known electronics manufacturers introduced tablets for less than $200 during the 2010 fourth-quarter shopping season, but they didn't make much of an impact, O'Donnell noted. One company that did so, Augen, "is already out of business," he said.

Gold said that manufacturers have to be careful to assure consumers that low-priced tablets "are not a piece of junk." Low pricing tends to put pressure on manufacturers to use parts that are a generation older, and therefore cheaper, than what is currently available, Gold said.

"While $199 is potentially very attractive for consumers, it can be fraught with problems for manufacturers," Gold said. "Can companies like Lenovo or Samsung make any money selling them at that price? You'll see a lot of low-end tablet devices this fall, but the key is if the makers can do it profitably. If they can't, they won't do it very long."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at @matthamblen, or subscribe to Matt's RSS feed. His email address is mhamblen@computerworld.com.

Copyright © 2011 IDG Communications, Inc.

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