Apple iPad maintains a price advantage over competitors who-Press of Atlantic City

A new model of the iPad comes with several enhancements in the original version, but the same price, crippled efforts to rivals to break Apple Inc. to market emerging for tablet computers.

Competitors, such as the Motorola Mobility Holdings Inc., I can't cope processing the price of $ 499 iPad. The tablets, which are comparable to the iPad features worth hundreds of dollars more, while the cheaper tablets are worse than iPad in quality.

It is very unusual in the gadget business, where products are expensive. The competition then gradually brings prices. With the iPad, the opposite is happening.

It looks as if it is the result of Apple's strategy. It seems that the company chose, right from the start, to profit from his less than iPads from iPods and iPhones.

Apple's profit margin on the $ 499 iPad drawing model is about 25 percent, according to an estimate by Toni Sacconaghi of Bernstein Research.

The company's profit margin on all products, before the company director, was 38.5 percent in the last quarter. He and other analysts estimate that the margin for the iPhone 4 is 50 percent to 60 percent.

Available cheaper tablet computer, but also perform the screen, poor have poor touch sensitivity, and software for the poor, and are slow. For example, sold Archos tablet, which is roughly the size of the iPad for $ 370. Reviewers on CNET and Laptop Magazine, its screen washes out, if you're right before, and the touch detection issues.

Tablet that may correspond to the iPad 2 quality and functionality cost much more. For example, Motorola Xoom sells for $ 800, or $ 600 if the buyer agrees to two years of data service contract with Verizon Wireless. IPad 2, the same amount in memory-32 GB-and the mobile data network in Zurich, or Verizon is $ 729, it is not necessary.

Analysts say that Apple has several advantages, which it sell iPad profit at a price which would be completely to break-even or loss.

Apple sells about a third of iPads in their own shops and from its Web site. Apple is attacked by an intermediary, more capable of maintaining the slim profit margin for itself.

IPad also uses many of the same chip as the iPhone and iPod. This means that Apple could buy in huge quantities, and cost reduction.

Lam also speculates Apple uses its influence and its cash to ensure the supply of other key components: display touch screen, which make up a large proportion of the cost of the tablet.

Apple also creates its own processing chips iPad and iPhone. Xoom for Motorola buys its main processing chip from Nvidia Corp.-one other sellers.

One factor is the software, the charging of the tablet. Xoom and other rivals typically used a system of Android, Google Inc., Lam says, requires more memory, increase the cost of the product. Apple iPad software is not as ambitious about the "multitasking", or the ability to run more than one application at the same time, so it doesn't need as much memory.

In short, by using the Android forces iPad competitors for the production of more expensive machines, said Lam. they could reduce the cost of components work closely with Google to optimize the software, but meet the needs of a range of facilities and companies is difficult. Because Apple controls its own software, it's in a better position to adapt its own funds.

Posted in apple inc

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