Pricing Could Determine Samsung Galaxy Tab's Fate - InformationWeek
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9/3/2010
04:58 PM
Eric Zeman
Eric Zeman
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Pricing Could Determine Samsung Galaxy Tab's Fate

Samsung has not released official pricing for its new Android tablet, but its business partners are publishing prices that exceed $1,000 for the seven-inch Tab.

Samsung has yet to confirm how it will price the Galaxy Tab. According to a report, however, Samsung has given the Tab a suggested retail price of SEK 9,000 in Sweden, which includes the VAT. SEK 9,000 works out to a monstrous U.S.$1,240. (That's $740 more than the cheapest iPad.)

O2 in Germany said that the Galaxy Tab will cost about 759 Euros, which amounts to U.S.$972. What do you think? Is a seven-inch Android tablet worth a thousand bucks?

The important thing to consider here is that these are unsubsidized prices for the Tab. Just like cell phones, the Tab is likely to be sold by carriers with a data contract. That means the sale price will be several hundred dollars less than the full retail amount. But can carriers subsidize it enough?

If the Tab really does cost around $1,000, U.S. carriers will have to subsidize the heck out of it. I can't imagine the carriers will cover more than half the cost, which still leaves consumers responsible for $500 at the register. That $500 buys them a device, and a data contract between $40 and $60 per month for 24 months. That's a hefty expense.

By way of comparison, Apple's iPad looks like a bargain. The least expensive iPad costs $500, though with 3G the price ramps up to $630. Unlike the Galaxy Tab, the iPad is not being sold by carriers, is not being subsidized, and is being offered with a month-to-month plan. In other words, no ball-and-chain around your leg for two years. That's a huge financial incentive in the iPad's favor.

Even if we take the iPad out of the equation, pricing will be a critical factor for Samsung if it wants to sell a lot of these devices. The specs of the device are good, but by no means amazing. Will a 7-inch display be big enough? Will anyone pay $1,000 for it?

We can only hope that the prices being bandied about by Samsung's partners in Europe are guesses or estimates. For what it is, $1,000 is about $400 too much for the Tab.

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