iPad Competitors Need to Cut their Prices to Stand a Chance, Study Shows

A new iGR study reveals that Apple not only dominates the tablet market, but also that other OEM’s will have to release competing devices priced well below the $499 mark if they want to steal away some of Apple’s shine.

A computing niche “perhaps arguably created in 2010 with the first iPad,” the tablet space likely needs more aggressive pricing, “far less than the $499 Apple iPad 2 in order to stand a chance at generating the same level of sales,” iGR believes.

"Our ongoing survey results are pretty clear and consistent," says Matt Vartabedian, vice president of the wireless and mobile research service, "the vast majority of respondents are only interested in an iPad -- and it would take a discount well over $100 to convince them to buy another OEM's tablet."

The firm appropriately points out that people aren’t necessarily flocking for the iPad because it’s pretty and all, but because most competing tablets to date have offered lower specs at similar or higher prices.

The analysts at iGR believe one good example is the first Motorola Xoom.

The original, 7-inch Samsung Galaxy Tab or the HTC Flyer also didn’t compete with Apple’s tablet from a price standpoint, and they were heavily under-specced too.

“And as the march of Honeycomb-based tablets continued, the various OEMs -- Acer, Asus, Toshiba, Sony, Lenovo -- have all made some sort of compromise in specifications or distribution model to reach that $499 price level,” said iGR.

The "Apple premium", in Vartabedian’s view, kicks in when you look at the examination of the primary research survey data, he said.

While potential iPad buyers are more likely to spend $499 or more for the tablet experience, the same thing cannot be said about potential Android tablet buyers. The latter camp is much less likely to spend a similar amount and in fact, is more likely to spend “substantially less than $399,” according to the research.

Asked how much less a competing tablet would have to cost in order to convince them to switch camps, iPad fans suggested to iGR that the price point would have to be substantially lower.

iGR even claims to have been able to calculate an average "discount" that competing OEMs should market to get people to switch, but they appear unwilling to disclose that figure in the summary of their bigger report.

To obtain that report, which provides a depp analysis of the overall tablet market in the U.S., visit iGR here.