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

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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17 Comments

1. yyuu1000

Posts: 260; Member since: Jul 26, 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.

15. cezarepc

Posts: 718; Member since: Nov 23, 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)

2. rallyguy

Posts: 620; Member since: Mar 13, 2012

Accessories, and money spent at the Play store.

3. biophone

Posts: 1994; Member since: Jun 15, 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.

13. AppleIsGod

Posts: 56; Member since: Aug 27, 2012

No, that credit goes to the Kindle Fire.

14. biophone

Posts: 1994; Member since: Jun 15, 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

4. torr310

Posts: 1691; Member since: Oct 27, 2011

So... low profit = good deal?

5. biophone

Posts: 1994; Member since: Jun 15, 2011

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

6. vincelongman

Posts: 5745; Member since: Feb 10, 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.

11. TheLolGuy

Posts: 483; Member since: Mar 05, 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)

7. 14545

Posts: 1835; Member since: Nov 22, 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.

8. krimHD

Posts: 106; Member since: May 23, 2012

its helping google push their OS more

9. 1ceTr0n

Posts: 549; Member since: May 20, 2012

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

10. Edmund

Posts: 656; Member since: Jul 13, 2012

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

12. sprockkets

Posts: 1612; Member since: Jan 16, 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.

16. TheBitterTruth unregistered

Apple is greedy!

17. martinlosha unregistered

Give them for free.....

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