In what might just be a sign of things to come in the United States’ nascent tablet computing market, Samsung has slashed pricing almost one-third on its Galaxy Tab in some parts of Europe.
The cost of the tab considered a leading candidate for “iPad Killer” status has plunged in recent days, falling $1,109 to $745 at some of the United Kingdom’s major portals such as Amazon . In Germany, prices have also dropped, but the Android tablet’s cost remained the same in France.
Executives at Apple have long been confident that competitors would have a tough time matching the "aggressively" priced iPad . At the same time, analyst predicted in order to take a bite out of Apple's 95 percent market share in the burgeoning tablet space, companies need to find a way to undercut these already competitive price points, or find something from a technology standpoint to offer consumers that Apple’s iPad does not.
Dmitriy Molchanov, an analyst with the Yankee Group, recently told iPadNewsDaily that Apple has been able to be very aggressive pricing the iPads because practically everything used inside to build it is also used in Apple’s other products.
“Apple hit a very competitive price point for one major reason,” said Molchanov. “They use a lot of the same materials, chipsets and manufacturers for several products including the iPhone, iPod Touch and even Apple TV. So they are hitting a lot of economies of scale.”
The one way companies like Samsung have been looking to cut into that price advantage is through shrinking the LCD touch screens . Molchanov says the touch screen is 30 percent of the total cost of building an iPad because the size is different than Apple’s other device screens.
“It is the one point where they haven’t been able to scale,” said Molchanov. “So a lot of competitors attempt to scale the LCD. “
The cost reduction comes just two weeks after Samsung released the tablet in Britain, and possibly could mean they initially overrated demand.