Time to pop a 'Tablet'

There has been such a frenzy in the tablet market over the last few weeks , that I could not resist but blog. To start of the blog , a brief about the happenings in the tablet arena:-

1) Apple announced its iPad version 2 today!

2) Announcement happens at a strategic time when the Motorola just announced about its Android powered Zoom !

3) 10 new tablets are going to be released this year!! (One of them being from India [NotionInk])

4)HP about 6 hours ago announced their Tablet rendition running on WebOS( Palm developed platform)http://www.cnn.com/2011/TECH/mobile/02/09/hp.webos/index.html?eref=mrss_igoogle_cnn

My favorite pick of the 3 has got to be the first! Apple could not have found a better time to shake up consumers and deter their focus away from "Android" . Its all so fair :) .Whats better the pricing beats the c*** out of all other tablet players. For 500 bucks I get a world class , cool gizmo with backed by a App store. Xoom which is priced at 800$ cannot even match up to that price point. If there can be one it is going to be the technology behemoth HP. They have not officially revealed the price of the tablets yet. But my hunch is it will be priced anywhere between 600-800 bucks. They after all have to recover their money from the Palm acquisition.

So one starts thinking why is that Apple always comes out victorious in these battles (Atleast for now!). I start digging for facts and data out there on the net and I landed back to the birthplace of these technology gizmos 'Fox-conn'. As I had previously mentioned Foxconn based out of China is one large gigantic organization that churns out hardware for many of Worlds leading hardware suppliers in the world. OK , so what? Motorola/HP can outsource the manufacturing of these gizmos to Foxconn, and Presto !

But there is more than it than meets the eye. I went out researching (Googling if you may) how Apple reached the enviable position it is now. So ,the turtleneck shirt wearing executives at Apple have laid out a more elaborate strategy from 2001. They simply played by the books. Vertical integration across the supply chain albeit a step lower. They went ahead and placed orders for the hardware components required to manufacture these gizmos well in advance and to the tune of 10m+ !

So semiconductor manufacturers like Samsung (Ironic!) , LG , Phillips etc have their their hands tied down by contractual agreements with Apple to serve it. Whats more Apple which is sitting on huge cash reserves ($50 B +) have gone ahead and implemented strategically in many of these manufacturer labs to augment the production. Two things that jumps out are

a)Apple places orders well in advance

b)They are not looking to set up their own labs . A very good ploy I must add.

So finally it becomes zero sum game , where Apple so eliminating the competition out on price. The recent news about HP touchpad did not shake up the stock market hawks simply because they did not place a $ figure. This indicates a price point has been established by customers at which they expect the luxuries of a tablet are served to them. Adding to it, rumors are rife that iPad2 is going to be sold much cheaper. Of course it was going to be , Apple was going to pull this one out of its sleeve any moment. Again playing by the textbooks : Economies of scale , with large cash reserves they can afford for mass volume discounting and completely squeeze out the competition out of the market.

I am not much of an Apple fan but my hunch is in the long run HP is the only potent competitor that can carry home sizable chunk of the 'Tablet' pie.

Looking forward to your thoughts!