Are they having a laugh?
Every comment we had on our Samsung Galaxy Tab availability story yesterday said the same thing: "ouch!" at the price. The consensus standalone price of Samsung's supposed iPad rival is £529, which is exactly the same price as the 16GB 3G iPad, and people are questioning whether that price is justified.
Market researcher iSuppli has had a go at calculating the bill of materials (BOM) of the Samsung Galaxy Tab and, when compared to the BOM study it made of the 16GB 3G iPad - which is directly equivalent, not just in terms of price, but spec too - it makes surprising reading.
It's generally assumed that Apple is so successful not just because it makes desirable products, but because it commands far greater margins than its competitors. This may well be true in many of its product categories, but not in tablets it seems.
The iSuppli BOM breakdown for the Tab, which we've reproduced below, estimates that the total cost of the components in the Samsung tablet comes to around $205. The BOM estimation for the 16GB 3G iPad is $59 more.
Just let that sink in for a second. Samsung expects to make $59 more margin on a product that, not only is competing against a well established rival made by the world's strongest technology brand, but has a three inch smaller screen and runs an OS that is not yet optimised for tablets (although the same could be argued about iOS). Also, Samsung wants £100 more for the Tab than the Samsung Galaxy S, despite is apparently only the screen size that differentiates them.
We have to wonder what planet Samsung is on with this pricing. When launching a smaller product seven months after the dominant player you would have thought its strategy would have been extreme price aggressiveness to wrestle market share away. Instead Samsung has chosen to trouser $59 more per unit than even the avaricious Apple and we fear its sales will suffer as a consequence.
Table and images courtesy of iSuppli, of course.
