Three Keys for iPad Rivals: Price, Price, and Price

Perhaps you’ve seen that a number of major vendors announced plans to introduce a tablet PC of some sort at CES. No, the 2011 CES. Yes, you are correct that those same vendors announced tablet plans at last year’s CES and nothing ever materialized, but this year they’re serious. Many of the specs and capabilities are superior to what the Apple iPad has to offer, unfortunately they all seem to fail at the only spec that matter: price.

The Motorola Xoom is apparently imminent, and the HP TouchPad and BlackBerry PlayBook are expected soon–among a plethora of other options. Samsung is getting ready to roll out its second-generation Galaxy Tab. Many of these tablet competitors have dual-core processors and four times the RAM of the iPad. They also have front and rear-facing cameras, and USB ports, and SD memory card slots for expandable storage, and they play nice with Adobe Flash. All nice features, but all overshadowed by the fact that these tablets all cost as much or more than the iPad.

Why is price the most important? Well, the economy has seen better days and consumers and companies are all a bit more hyper-focused on saving a buck. Tablets are still a fairly nascent market struggling to establish itself somewhere between ereaders and laptops. The tablet can replace a netbook or notebook as a primary mobile computing device in many cases, but it becomes a much harder sell if the tablet costs more than the notebook it’s replacing.

But, the real reason that price is such an issue is the aura Apple has created for itself. The fabled Apple reality distortion field inflates the perceived value of Apple gadgets. There is a wide variety of digital music playing devices out there. Some of them–such as Microsoft’s Zune–are considered by many to be technically superior to Apple’s iPod lineup, but they have to undercut Apple’s prices to have a chance at competing.

The 16GB Samsung Galaxy Tab sells for $500–but it is smaller than the iPad and runs an Android OS that isn’t meant for tablets. The BlackBerry PlayBook is expected to be available for $500 for the 16GB version. There is no official price for the Motorola Xoom, but leaks and rumors have suggested it will be $800, and a page live this past weekend on the Best Buy Web site showed the price of the Motorola tablet to be a mind-numbing $1200.

AT the $500 price range, iPad competitors are at least on par with the entry-level price of the 16GB Wi-Fi only iPad. The additional features (Adobe Flash, cameras, SD memory, etc.) mean you are getting more bang for your buck, but there is still that Apple distortion field to contend with–making these rival tablets seem overpriced.

Soon, Apple will announce details of the second generation iPad. If iPod and iPhone history are any indication, Apple does not generally bump the price up. Assuming the iPad 2 has at least a dual-core processor, 1GB of RAM, and front and rear facing cameras, it will have caught up to competing tablets that are just launching. If Apple launches the iPad 2 in spring as predicted, and surpasses those expectations and raises the bar–even a little bit–tablets like the TouchPad, Galaxy Tab 10.1, and PlayBook will be obsolete before they’re even available.

When it comes to tablets in general, price is a crucial factor for distinguishing the device from netbooks and notebooks. When it comes to competing with the iPad, there are three things that will make the difference: price, price, and price.