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June 11, 2012

Report: Average tablet price declines by 21% in Q1 of 2012

The decline in price is led by intense competition in the tablet PC market

By CBR Staff Writer

The average selling prices (ASPs) of tablets have declined by 21% to $386 in the first quarter of 2012, according to recently released figures by IMS Research.

After the release of the new iPad, Apple reduced the entry price of the iPad 2 to $399, which means greater price pressure on its rivals, making them also to reduce price to make their products competitive, IMS noted.

The report, World Tablet PC Market Tracker, shows that vendors of low-end tablets have also pulled the average price down in spite of booming shipments.

Low-end tablets typically have prices below $200, but brands like the white-box tablet PCs have lowered prices below this average and have as a result won widespread adoption of products in the first quarter, primarily in emerging countries.

IMS market analyst and report author Gerry Xu said there are few innovations from vendors to differentiate their tablets; low price seems to be the major factor to attract consumers to buy tablets other than iPads.

"More vendors are expected to focus on the low-end tablet market," he added.

"However, to balance performance and profitability with a low price remains challenging for most tablet vendors."

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Also, medium and small brands and white-box vendors dominate the low-end tablet market, and found to be cost driven and less focused on user experience.

Low-end tablets meet the needs of price-sensitive consumers, majorly in emerging countries, where consumers tend to use the portable media player, eBook reader and GPS functions on their tablets.

IMS Research revealed upcoming products like the second version of Kindle Fire and the Google Tablet, will mean increasing pressure on vendors of low-end tablets to enhance performance while still keeping prices low.

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