Tablet manufacturers likely to reduce prices

Non-Apple tablet brands are facing a situation where their sales figures are lower than expected, leading to a pile up of stocks in their yards. To clear their stocks they are expected to reduce the prices of tablets, Digitimes reported citing sources in tablet manufacturers.

The decision to reduce the price of tablets is also expected to trigger a new price war within the tablet industry.

Asustek, which sells its Transformer tablet in India, had shipments of 700,000 tablets from May to July with actual sales only reaching 500,000 units, according to Digitimes' figures. The tablet, which is selling now for Rs 31,500 in India, is expected, at Rs 25,000, to be cheaper by nearly 20 per cent by December.

BlackBerry Playbook and HTC Flyer are already placing their hopes in 2012 while both Samsung and Motorola are suffering weaker demand for their tablets. The report further added that some the other players, such as Acer, are gradually reducing their orders.

Digitimes expects the current average price of tablets of $370 to come down to $350 in September and to $300 by December, which means a reduction of close to 20 per cent.

If these predictions come true, tablet prices in India will see a correction. The price of BlackBerry PlayBook, which currently costs Rs 28,000 (for the base version with 16 GB memory), is likely to come down to Rs 24,000. And the HTC Flyer, which is one of the most expensive tablets at Rs 37,500, may see a correction of close to Rs 7,000.

Acer also has two tablets under its Iconia brand with W500 (Windows) and A500 (Android). Iconia A500 is currently retailing at an attractive Rs 26,900, and if it comes down to about Rs 22,000 with the price correction it will be all the more attractive.

The price correction is also expected to put pressure on domestic brands like Reliance Communications, Olive, Beetel, MSI, and Viewsonic, and that would mean having tablets at below Rs 10,000. Currently there are two tablets, one from RCom and the other from MSI, which are retailing at around Rs 12,500. A price war among tablet manufacturers may even prompt these players to reduce tablet prices to below Rs 10,000.

This will not just mean better options, it will also mean that more people will be able to benefit from 3G enabled wireless broadband, pushing broadband usage further and popularizing 3G and WiFi networks