SAN FRANCISCO—Samsung Electronics Co. Ltd.'s Galaxy Note 10.1 media tablet could deliver higher profit margins than Apple Inc.'s market-leading iPad—if Samsung can maintain its target selling prices—according to a preliminary teardown analysis of the tablet conducted by IHS iSuppli.
According to the teardown analysis, the HSPA+ version of the Galaxy Note 10.1 carries bill of materials (BOM) costs of about $283. Adding in basic manufacturing costs, the tablet costs about $293 to make, according to IHS. Samsung is selling this version of the tablet for about $640, IHS said.
"With the Galaxy Note 10.1, Samsung continues to seek the magic formula for a media tablet that can rival the iPad’s market penetration,” said Andrew Rassweiler, senior director of teardown services at IHS, in a statement. “And where some other tablets introduced in recent times generated small or no hardware profit, the Galaxy Note 10.1 could turn a decent per unit margin for Samsung, and stands to be a money maker—if the company can extend the recent success of the Samsung Galaxy Note smartphone to its tablet line."
The Wi-Fi-only version of the Galaxy Note 10.1, which retails for $499 in the U.S., carries an estimated BOM cost of about $260, according to IHS. A similarly equipped third-generation new iPad with Wi-Fi and 16GBytes of NAND flash memory carried a $316 at the time of release and a retail price of $499, the firm said.
IHS noted that tablet vendors have had trouble maintaining the opening sales price over time.
"The hardware profit margin for the Galaxy Note 10.1 only holds true if Samsung is able to maintain its initial price. And therein lies the rub: no Apple rival has yet demonstrated the capability to actually sell in volume at $499, instead falling back on price cuts in order to drive volume,” said Rhoda Alexander, director of tablet and monitor research for IHS.
Yet samsung has a display with similar pixel density(320ish) as iPhone(330ish) on their phones!! iPad display density is even lower at ~260. I guess the reason they havent had such a display is that Android drains battery quickly(my Galaxy s3 drains to 20% in like 12-15 hours)
And there you go–once you get past the (potentially-infringing) Apple elements, one is left with a market dynamic for Android tablets analogous to that of Windows desktop/laptop PCs. As an Android (and iOS) developer, one can only focus on limited subsets of hardware for design, testing and evaluation–Samsung remains the best hardware of the lot.
@kinnar- that is a big part of the attraction of the Android OS, isn't it? The counterargument is that in a sense all Android phones and tablets are largely the same, which is another reason that Samsung may have difficulty maintaining its selling prices.
The higher margin is straight away can be figured out as Samsung was not to invest much on the OS design and development only driver compatibility with Android was the software part for Samsung where as IOS is totally design developed and maintained by Apple. So Samsung could had thought of entering into market with less profit margin covering high volume.
"if Samsung can maintain its target selling prices" Its a huge if Dylan. Add to that, samsung sold only 200K tabs till now in US.
Not every rectangular touch screen device violates Apple patents. All most all touch screen phones/tablets from NOKIA/RIM/HTC are rectangular.
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