This whole frenzy over a $100 tablet is really a lesson for the whole industry and don’t think that Google (plus Motorola) aren’t watching this and plotting their next move. Fundamentally, the ability to get a $100 tablet based web browser is a huge draw. Call it what it is because no one is buying a TouchPad for its extensive app catalogue. There’s really a single draw to it (aside from the tinkerer/techies out there) and that’s a simple tablet with HTML5 plus Flash for freaking $100. And that’s why I’m two deep, hopefully going on three. I expect nothing more or less from it than the ability to browse the web, play a few videos and the like and I’m ok that it’s just a polished Chromiun tablet.

But I’m not alone here. Google gets this too and by having Motorola under its wing they can do something really significant and game changing here. They can release a tablet with mediocre specs that at least hit the TouchPad expectations and unlike anyone else in the industry they don’t need to make a dime off the hardware. In fact, if they break even or even lose a few bucks they’d be fine with that. Never lose site of the fact that Google is looking to serve you ads and if they break even on the hardware but gain on ads that’s a net win for them so game on. And that means that if they can put together a tablet where the components hit this $100 mark then expect it to hit the market seriously hard. So hard it will market itself just like this Touchpad frenzy. At $100 it’s such a small investment and people expect so little that it’s hard to not meet those expectations. And that’s a net win. The end result is that Google perpetuates its ad services and end users get a tablet web browser – not a replacement PC but everyone knows that going into it. In fact, if it runs Android instead of Chromium and has fancy apps and all then it’s just a cherry on top.

Jimski made a great analogy to the razor industry noting that Gillette has no problem giving away razors in exchange for blades that have 300% markups on them. Same thing here.

So my prediction – within one year Motogoo will release a low end tablet with a $100 price point (I’m calling it the Toggle – tablet+Google but I’m willing to negotiate that) and that tablet will become the top selling tablet. Don’t confuse that with the best tablet out. They’re totally different metrics. But it will sell like a mother…uhm sell like TouchPads on a fire sale. Don’t worry iPad users- these things aren’t going after the same base and it’s still an inferior product but a single device at such a low price point will impact the market so be prepared.

8 COMMENTS

  1. I don’t think a budget, low end, ad supported web browser with basic app functionality will outsell the iPad. In fact, I don’t think anything short of a miracle will outsell the iPad at this point. Yes, even windows 8 tablets… Remember, windows tablets are NOT a new idea. Windows XP tablets didn’t sell. Windows 7 tablets didn’t sell, why do people all of a sudden think that Windows 8 tablets are going to overcome a 100 million+ unit sales deficit by the time they hit mass production? Will units be sold? Sure.. Even the playbook has had a few sales… (don’t use the touchpad as an example, a firesale isn’t a sales tactic, it’s a last gasp from HP before climbing into their own coffin).

    Again, I don’t doubt a manufacturer will release a tablet device at $100, but I seriously doubt it will outsell the iPad.

  2. They can’t do this because they would be using their dominance in one market to kill off competition in another and that would get them in major legal trouble.

    This is exactly what got Microsoft nearly broken up. MS used its desktop dominance and leveraged it to sell a product below cost (IE) in order to kill off competition of (Netscape). MS learned without any doublt that doing what your recommending is illegal monopolistic behavior.

    They are already close to this with Android, but may be dodging it by making it open Source. However, you can’t open source hardware.

  3. iChris: The iPad is popular and successful because it had little or no competition at launch and gain footing quickly. But all people are naturally price conscious. Just check Walmart’s sales figures for last month (or any month) if there is any doubt. Being on top has its advantages and disadvantages. Being top dog makes you the model, and target, for others. Build a device with; similar specs, a well designed OS, without the fixed pricing and ridiculous markups Apple imposes, and it will be game on. Price point will win over brand loyalty every time.

  4. If this is true, the “razor thin” PC maker margins will look like striking gold to tablet makers. In no way the components in tablets are worth less than $300. iPad margins are significantly less than iPhone margins, and that baby sells for $500 and up.

  5. Really that isn’t a tablet. Its just a portable web and entertainment device. Its almost like its own category that would be formed. The eReader, the tablet and the Web Device. Either way I agree that this won’t affect iPad says at all. This will be scooped up by the masses who don’t know any better than to blow $100 on something they don’t need. If you’re out and about and wanting to use the web browser chances are you either have a cell phone that you are already using and prefer to use or you don’t have the cash to afford a seperate data plan to make the device usable.

  6. I can’t imagine a $100 tablet would be worth looking at, much less buying. Besides, OEMs are having a difficult time giving away Android tablets. The only one that even close to moving the needle is the Galaxy Tab.

  7. I am probably not going to buy a $100 sub standard tablet to browse the web. I don’t want some POS in my house that I have to support / Admin for my wife and kids to Bitch about how bad “This sucks, why can’t we just get an Ipad?!” No thank you. I can just see it now, plastic and Plexiglases, full of adds. Damn, I feel the quality of future devices is in jeopardy. That would make me switch to apple! That is a promise. Give me crap, and I will move on. That is why I left WinMo. The first offering of new Windows Phones on At+t VS the Android 5″ Dell Streak. I will be ready to buy again in the first half of 2012. Hoping Windows Phone has a device for me. Looking forward to seeing the Sony S2, but so far it looks ugly and cheap. I like the dual screen concept though.
    Peace

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