Friday, September 3, 2010

Samsung Galaxy Tab: News Update

Boy Genius Report is reporting that the Galaxy Tab could be coming to Sprint this November.  This would be available in both 3G & 4G.  Since Sprint & Verizon both use CDMA, this should not be a surprised to see both carriers carry the Galaxy Tab.

Based on the specs and some initial videos of the Galaxy Tab, it looks like a winner.  We could have our first top tier Android tablet.  However, there is a concern as to whether the Galaxy Tab can succeed. 

Although Samsung has not confirmed any pricing, there are some indications as to where the pricing will fall.  Apparently, Samsung has given a suggested retail price of SEK 9,000 in Sweden, which includes the VAT.  SEK 9,000 would equate to almost $1,240.  In Germany, the rumor is €759 (about $972) and €699 ($890) in France.  Of course, these are unsubsidized pricing.

However unless the price is heavily subsidized to bring this under $500, we believe Samsung will have trouble selling this.  In order for a tablet to sell successfully, the specs & quality must not only be top tier (which the Galaxy Tab appears to have) but also be reasonably priced.  We have mentioned this before but in order to successfully sell a tablet, it should be priced less than $600 and even this amount is on the high end.  Ideally, $400 - $500 would be the target pricing with very reasonable specs.  Seriously, who is going to pay $800 - $1,200 for a tablet where you have to pay another $30 - $40/month for a data plan.  Cellular carriers subsidize an average 65% - 60% of a smartphone.  We all know that cell phone companies make money on the monthly data charge.  It is unlikely that carriers will subsidize 60% of a $1,000 tablet which would equate a $600 upfront cost for the cellular providers.  Where smartphones costs $450 - $550, the providers are only "upfronting" $300 in cost.  Big difference.

We will find out this fall. 

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