For most individuals, Santa brought a cornucopia of
electronics, gift cards and items to exchange or return. Tech
bloggers found an extra surprise in their stockings: reports of
and an Acer tablet
priced at $99
. The products sound promising -- Apple (NASDAQ:
) will reportedly release a thinner and lighter version of the
full-size iPad. The company may also add a Retina Display to the
iPad Mini. Meanwhile, Acer is believed to be developing a
low-cost tablet that will retail for $99 in China and other
emerging markets. It is not yet known if Acer's seven-inch
device, which has yet to be confirmed, will come to the United
Acer is the second company that is rumored to be developing a
$99 tablet. Asus, which produced the Nexus 7 for Google (NASDAQ:
), recently denied a report that it would do the same.
As an emerging market tablet, Acer's $99 device will compete
with a number of high-end products from big manufacturers,
including Apple. It may soon compete with Amazon (NASDAQ:
), which has been setting the stage for a
. However, Acer is designing the tablet to compete more
effectively against white-box tablet makers from China, which
already produce cheap tablets.
Thus far, consumers seem to prefer the higher-end products
that Apple develops. The iPad has dominated the tablet market
since the day it was released. That domination continued in China
last quarter when Apple produced
more than 70 percent
of the tablets sold in the nation. With a starting price of $329
in America, the iPad Mini is anything but cheap.
If Acer is able to charge 1/3 of that price, it could prove to
be a positive move for the manufacturer. Consumers are not easily
persuaded to make a generic tablet purchase. After releasing the
HP TouchPad, Hewlett-Packard (NYSE:
) learned that a lower price can
However, Hewlett-Packard had one advantage that other cheap
tablets do not. By starting at $499, consumers thought of the HP
TouchPad as being an expensive high-end alternative to the iPad.
No one bought it at that price because they figured that if they
were going to spend that much money they might as well get an
iDevice. That changed the moment Hewlett-Packard lowered the
price to $99, at which point consumers believed that they were
getting a $500 tablet for 1/5 the price.
In order for Acer's $99 tablet to achieve a high level of
success, the company needs to convince consumers -- in China,
America or anywhere else in the world -- that they are getting a
device of a much higher quality than the price suggests.
(c) 2012 Benzinga.com. Benzinga does not provide investment
advice. All rights reserved.