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The Samsung Galaxy Tab has a bigger mark-up than the iPad

by Scott Bicheno on 2 November 2010, 10:19

Tags: Samsung (005935.KS), iSuppli

Quick Link: HEXUS.net/qa2tj

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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.

 

 

 

 



HEXUS Forums :: 7 Comments

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Not a massive surprise considering that most of that difference is in the screen - 57$ for the samsungs 7“ 1024x600 standard TFT screen vs 97$ for the ipad's vastly superior 9.7” 1024x768 IPS panel - and I presume the rest of the cost will be the plastic rather than metal casing.

The tab really smacks of being rushed out to try and get at least some of the market which Apple currently has sewn up - until Google release Android 3, and developers are encouraged to product apps for the tablets as well as android phones, they will struggle.

It will sell of course but I don't think it will be the game changer they want - yet. IF they bring Android 3.0 to it and IF developers get fully on board and IF they get competitive on price..then they really have a chance to steal a large % of Apples share. As it stands I don't think they have any chance, however many anti-apple geeks buy one.
i was going to have a small rant about samsung but the article says it all. What can you expect from a conglomerate other than nonsensical moves like this, which are probably spawned by bureaucracy.
We have to wonder what planet Samsung is on with this pricing.

They think they have a bunch of Samsung fanboys who don't think and just buy because it's new from Samsung. Unfortunately, they don't have that type of people in their market.
Spud1
Not a massive surprise considering that most of that difference is in the screen - 57$ for the samsungs 7“ 1024x600 standard TFT screen vs 97$ for the ipad's vastly superior 9.7” 1024x768 IPS panel - and I presume the rest of the cost will be the plastic rather than metal casing.
I wouldn't call it vastly superior myself, look at the pixel density.

Also IPS doesn't mean its great off the bat, the iPad screen didn't strike me as good, its not bad mind (like these NEC MultiSyncs I type this on….) but its not good like my loverly 3011s.

Also I've not read anywhere what kind of generation the LMS700JF03 is. So I wouldn't personally slate it until I've had a hands on, the higher pixel denisity is bound to make its angles worse, its just a case of how much (hold a 3g iPhone next to a 4g).

The thing is samsung has set a stupid price point and I think that is because they are the first non apple (this is appealing to many devs they might think). Unless they spend whats less on marketing they don't have a chance. But if they film enough people driving round on the back of italian style scooters clutching it with soft easy to listen to music in the back streets of shoreditch they might just have a chance