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Enter the Samsung Galaxy Tab. The Galaxy Tab is the first mainstream, production-ready iPad competitor that appears to have some Samsung marketing muscle behind it. First to launch was the Dell Streak, but with a 5" screen at $299 with a carrier contract requirement, or $550 unlocked, who's going to buy this?

Could the Samsung Galaxy Tab, which pushed out to market with great fanfare, suffer the same fate the Dell Streak is already experiencing? Absolutely.

PC manufactures have sold against Apple with a pricing-is-king mentality. Equip a product with more memory, more ports, or more storage and sell it for less than a Mac and it will sell. In the PC world, this worked very well, but it only offers one value position, price.

When Apple launched the iPad, there was a general consensus of a $999 price point. Apple blew the market away with a $499 entry price and sent the competition back to the drawing board, creating a huge problem for the competition.

Today there is a massive elephant in the room, and it appears most are too scared to ask the question: "If price is the play against Apple products, then what is the Dell Streak or the Galaxy Tab's value proposition in relation to the iPad?" The Dell streak holds no price value against the iPad, and we can't measure the Galaxy Tab's position because we don't even know it's price yet, but there are indications the Galaxy Tab will be significantly higher in price than a pound to pound iPad.

Herein lies the problem for the Galaxy Tab and any other iPad competitor. Forthcoming iPad look-a-likes are not going to compete with Apple's iPad on price and specification.

The price and spec. paradigm switch of Apple's iPad versus it's rival's is not trivial, it's profound.

When the iPod came to market, something happened with Apple and it's competitors that had not happened in the nascent PC industry. Apple was able to leverage it's complete vertical hardware-software solution like never before, and leverage economies of scale the competition couldn't compete with. Apple didn't lose sight of it's newfound purchasing powers and quickly gained a foothold with iPods pricing with solid-state storage capabilities and never let go.

Apple now has the iPad well out in front of the competition and largely nailed the product design and interface from the day of launch. iPad is nearing 3 million sales per month, which won't be easily matched by any one product for years.

Given Apple's memory purchase leverage, it's own in-house chip design and sunk costs into precision tooling and manufacturing capabilities, how will the competition compete? For quite some time to come... they can't.

2 Comments

1. Synth ~ September 21, 2010 22:08
   Exactly. This time around, Apple doesn't just have a great device, like with the Mac. (Actually, an unholy trinity of iDevices-iPhone/iPod touch/iPad) Apple has a great device, which is very price competitive AND already has the entire ecosystem in place: apps, retail, e-books, largest online media store, iAds and peripherals. This time around, Apple does not have to rely on Microsoft, Adobe, Circuit City, CompUSA or even misguided IT departments to get people to buy iDevices. The iPhone will have decent competition for the near future because the big players/volumes/telcos were already in place and still choke off freedom of choice. But the tablet market will be a bloodbath. Think about it. Why did Apple already release the wifi version of the iPad in China? No neanderthal telcos to deal with this time around. Ditto for Facetime. The iPod touch will grab the under 20 tablet market and the iPad will grab everything else.
2. Neil Anderson ~ September 22, 2010 00:29
   Three million iPads a month! Wow, forecasts for non-Apple tablets for all of 2010 was about three million.

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