Average Tablet PC Price Declined Significantly in 1Q 2012

According to recently released figures in the IMS Research (recently acquired by IHS Inc.) quarterly tablet PC tracker, tablet ASPs (average selling prices) have declined by 21 percent in a single year to $386 in the first quarter of 2012.

The report’s author, China-based IMS Research Market Analyst Gerry Xu, says the decline in price reflects intense competition in the tablet PC market. With the release of the new iPad, Apple reduced the entry price of the iPad 2 to $399, which has resulted in greater price pressure on its rivals, forcing them also to reduce price to make their products competitive.

Despite booming shipments of low-end tablets, vendors of this tier have also pulled the average price down. Low-end tablets typically have prices below $200. However, brands like the white-box tablet PCs have lowered prices below this average and as a result have won widespread adoption in this quarter, primarily in emerging countries.

“There are few innovations from vendors to differentiate their tablets; low price seems to be the major factor to attract consumers to buy tablets other than iPads,” says Xu. “More vendors are expected to focus on the low-end tablet market. However, to balance performance and profitability with a low price remains challenging for most tablet vendors.”

The low-end tablet market is dominated by medium and small brands and also white-box vendors, which are cost driven and less focused on user experience. These products fulfill the needs of price-sensitive consumers, especially those in emerging countries, who tend to use the portable media player, eBook reader, and GPS functions on their tablets. However, upcoming products, such as the second version of Kindle Fire and the Google Tablet, will mean increasing pressure vendors of low-end tablet s to enhance performance while still keeping prices low.

IMS Research’s World Tablet PC Market Tracker examines the world market for tablet PCs every quarter, including unit shipments, ASPs and revenues. Further splits include: by platform, OS, panel size, price range, wireless connectivity and region. It is updated every quarter and includes market shares of the top 10 OEMs.