High price helps iPad

High margins turn competish into bottom feeders?

Handy guide to tablet warriors | New fronts in tablet war

While there are plenty of companies gunning for Apple as the tablet market heats up, most have one thing in common: They’re planning to use price as a battlefield.

The iPad might be affordable by Apple standards, but it’s hardly a cheap piece of hardware, with prices ranging from $499-$829. And many competitors see that as an opening.

There’s an advantage to serving the high-end market, though. Sure, Apple could sell the iPad for a lot less. The device only cost between $229 and $270 to produce at launch according to estimated bill-of-materials and manufacturing cost analysis — and that has likely dropped since that time. But by keeping prices at a premium, Apple doesn’t have to win the market share battle to still keep its margins healthy.

And given how many competitors are about to enter the market, that’s good news for Jobs & Co.

“I think they can be toppled,” says Rhoda Alexander, Director of Monitor Research for iSuppli. “(But) is there room for someone to topple Apple at the same price point? I’m not sure there’s competition that can compete head to head at (that level).”

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