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You know all those sub-$200 7" tablets? Apparently its hard to make profits on them

Posted: , by Michael H.

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You know all those sub-$200 7
Just in case you haven't read a story that made you think "Thank you, Professor Obvious", here's one for you: DigiTimes has done some research (we're not sure that was necessary) and found that the price competition surrounding 7" tablets has caused profits to "erode". We bet you never would have thought that devices sold just above cost would cause a drop in profits, right?

Of course, we're not really talking about the Apple iPad mini in this, because Apple is going to get its profits, as shown with the $329 price on the mini. The real target of this are tablets like the Nexus 7, Asus MeMO Pad, and Acer Iconia B1. These devices are already priced aggressively, but the competition in the 7" market has caused Acer and Asus to drop the prices even further, which obviously cuts profits. 

Additionally, DigiTimes found that unlike those who purchase 10" tablets, customers who choose 7" tablets are less likely to purchase accessories to go along with their new device, and accessories are often high margin items for manufacturers. 

source: DigiTimes

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posted on 30 Apr 2013, 17:39 5

1. yyuu1000 (Posts: 152; Member since: 26 Jul 2012)


Well I have a nexus 7,it is a very good tablet it should be easily 300 but that 200 dollars price is hard to make money off, I have accessories for it.

posted on 01 May 2013, 00:15

15. cezarepc (Posts: 454; Member since: 23 Nov 2012)


I have a Nexus7 too as well and my accessories are worth around the same as my tab (Seidio active case, sony walkman headsets, ArmorSuite)

posted on 30 Apr 2013, 17:51

2. rallyguy (Posts: 516; Member since: 13 Mar 2012)


Accessories, and money spent at the Play store.

posted on 30 Apr 2013, 18:11 4

3. biophone (Posts: 1893; Member since: 15 Jun 2011)


This is good for google because the low price devices are getting people on the internet. The nexus 7 really pioneered this space. Other companies had to follow. I can see why google wanted it to trend this way. This is why the nexus 7 was created.

posted on 30 Apr 2013, 20:54 1

13. AppleIsGod (Posts: 48; Member since: 27 Aug 2012)


No, that credit goes to the Kindle Fire.

posted on 30 Apr 2013, 22:36 1

14. biophone (Posts: 1893; Member since: 15 Jun 2011)


That's true but the kindle fire was kinda more of an ereader first tablet second. Nexus 7 was more of an Internet device

posted on 30 Apr 2013, 18:12

4. torr310 (Posts: 327; Member since: 27 Oct 2011)


So... low profit = good deal?

posted on 30 Apr 2013, 18:15 1

5. biophone (Posts: 1893; Member since: 15 Jun 2011)


It's only a good deal if it fit your needs and does what you need it to do.

posted on 30 Apr 2013, 18:18 1

6. vincelongman (Posts: 929; Member since: 10 Feb 2013)


Low profit on each sale, but they will defiantly sell much more. Therefore they probably make a very similar (or maybe better) profit than if it was higher priced.

posted on 30 Apr 2013, 18:47

11. TheLolGuy (Posts: 483; Member since: 05 Mar 2013)


In some cases it can be a good deal. But you have to be careful what you wish for... At a breaking point (varies from company to company) companies will try to widen the profit margin a little more by trimming quality components and build standards.

When you pay more for a device it's not always guaranteed you're getting your money's worth -- but when you pay less, you are always getting your money's worth (aka crap)

posted on 30 Apr 2013, 18:24

7. 14545 (Posts: 1052; Member since: 22 Nov 2011)


Well, it's kinda hard to buy accessories that don't exist. I mean ASUS released the dock like 6 months or longer after the tab itself. I think the case they produced was like 1-3 months. I mean if you are going to release something, have the accessories available on day one.

posted on 30 Apr 2013, 18:26

8. krimHD (Posts: 106; Member since: 23 May 2012)


its helping google push their OS more

posted on 30 Apr 2013, 18:28

9. 1ceTr0n (Posts: 501; Member since: 20 May 2012)


Remember, Apple doesn't know how to make a $500 computer thats not a peice of crap. So sayeth Steve Jobs.

posted on 30 Apr 2013, 18:45 1

10. Edmund (Posts: 653; Member since: 13 Jul 2012)


This segment is all but dead. Look up supply side economics and you'll understand why this model is unsustainable

posted on 30 Apr 2013, 19:25

12. sprockkets (Posts: 1075; Member since: 16 Jan 2012)


Apple sold around 7 million more ipads than last quarter of last year, and they still made the same amount of profits.

Obvious observation: The ipad mini's margins are lower than the ipad2 or the ipad4.

posted on 01 May 2013, 00:31

16. TheBitterTruth (unregistered)


Apple is greedy!

posted on 01 May 2013, 04:18

17. martinlosha (unregistered)


Give them for free.....

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